Financial Statements...The Chief Executive is responsible for the preparation and fair presentation of the financial statements in accordance with Australian Accounting Standards and

COVER PAGE 7

Sydney Local Health District

Financial Statements for the year ended 30 June 2019

INDEPENDENT AUDITOR’S REPORT


To Members of the New South Wales Parliament

Opinion

I have audited the accompanying financial statements of the Sydney Local Health District (the District),

which comprise the Statement of Comprehensive Income for the year ended 30 June 2019, the

Statement of Financial Position as at 30 June 2019, the Statement of Changes in Equity and the

Statement of Cash Flows for the year then ended, notes comprising a Statement of Significant

Accounting Policies and other explanatory information of the District and the consolidated entity. The

consolidated entity comprises the District and the entities it controlled at the year’s end or from time to

time during the financial year.

In my opinion, the financial statements:

• give a true and fair view of the financial position of the District and the consolidated entity as at

30 June 2019, and of their financial performance and cash flows for the year then ended in

accordance with Australian Accounting Standards

• are in accordance with section 45E of the Public Finance and Audit Act 1983 (PF&A Act) and

the Public Finance and Audit Regulation 2015.

My opinion should be read in conjunction with the rest of this report.

Basis for Opinion

I conducted my audit in accordance with Australian Auditing Standards. My responsibilities under the

standards are described in the ‘Auditor’s Responsibilities for the Audit of the Financial Statements’

section of my report.

I am independent of the District and the consolidated entity in accordance with the requirements of

the:

• Australian Auditing Standards

• Accounting Professional and Ethical Standards Board’s APES 110 ‘Code of Ethics for

Professional Accountants’ (APES 110).

I have fulfilled my other ethical responsibilities in accordance with APES 110.

Parliament promotes independence by ensuring the Auditor-General and the Audit Office of

New South Wales are not compromised in their roles by:

• providing that only Parliament, and not the executive government, can remove an

Auditor-General

• mandating the Auditor-General as auditor of public sector agencies

• precluding the Auditor-General from providing non-audit services.

I believe the audit evidence I have obtained is sufficient and appropriate to provide a basis for my

audit opinion.

Emphasis of Matter – Presentation of Budget Information

Without modification to the opinion expressed above, I draw attention to the basis of presenting

adjusted budget information detailed in Note 1(af). The note states that AASB 1055 ‘Budgetary

Reporting’ is not applicable to the District. It also states that, unlike the requirement in AASB 1055

‘Budgetary Reporting’ to present original budget information, the District’s financial statements present

adjusted budget information.

The Chief Executive’s Responsibilities for the Financial Statements

The Chief Executive is responsible for the preparation and fair presentation of the financial statements

in accordance with Australian Accounting Standards and the PF&A Act, and for such internal control

as the Chief Executive determines is necessary to enable the preparation and fair presentation of the

financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Chief Executive is responsible for assessing the ability of

the District and the consolidated entity to continue as a going concern, disclosing as applicable,

matters related to going concern and using the going concern basis of accounting except where

operations will cease as a result of an administrative restructure.

Auditor’s Responsibilities for the Audit of the Financial Statements

My objectives are to:

• obtain reasonable assurance about whether the financial statements as a whole are free from

material misstatement, whether due to fraud or error

• issue an Independent Auditor’s Report including my opinion.

Reasonable assurance is a high level of assurance, but does not guarantee an audit conducted in

accordance with Australian Auditing Standards will always detect material misstatements.

Misstatements can arise from fraud or error. Misstatements are considered material if, individually or

in aggregate, they could reasonably be expected to influence the economic decisions users take

based on the financial statements.

A description of my responsibilities for the audit of the financial statements is located at the Auditing

and Assurance Standards Board website at: www.auasb.gov.au/auditors_responsibilities/ar3.pdf. The

description forms part of my auditor’s report.

My opinion does not provide assurance:

• that the District or the consolidated entity carried out their activities effectively, efficiently and

economically

• about the assumptions used in formulating the budget figures disclosed in the financial

statements

• about the security and controls over the electronic publication of the audited financial

statements on any website where they may be presented

• about any other information which may have been hyperlinked to/from the financial statements.

David Daniels

Director, Financial Audit Services

Delegate of the Auditor-General for New South Wales

4 September 2019

SYDNEY

http://www.auasb.gov.au/auditors_responsibilities/ar3.pdf

Actual

Adjusted

Budget

Unaudited Actual Notes Actual

Adjusted

Budget

Unaudited Actual

2019 2019 2018 2019 2019 2018

$000 $000 $000 $000 $000 $000

Continuing Operations

Expenses excluding losses

----- ----- ----- Employee Related Expenses 2 1,180,581 1,173,441 1,102,570

1,096,565 1,092,033 1,050,294 Personnel Services 3 ----- ----- -----

52,381 50,692 48,280 Visiting Medical Officers 52,381 50,692 48,280

534,355 532,767 504,351 Other Expenses 4 536,570 532,767 507,183

56,295 57,244 54,475 Depreciation and Amortisation 1(n), 5 57,160 57,244 55,393

21,540 19,751 31,719 Grants and Subsidies 6 21,719 19,751 31,927

200 103 229 Finance Costs 1(i), 7 200 103 229

12,741 12,741 12,431 Payments to Affiliated Health Organisations 8 12,741 12,741 12,431

1,774,077 1,765,331 1,701,779 Total Expenses excluding losses 1,861,352 1,846,739 1,758,013

Revenue

1,452,129 1,427,129 1,388,556 NSW Ministry of Health Recurrent Allocations 1(j) 1,452,129 1,427,129 1,388,556

54,233 57,219 35,292 NSW Ministry of Health Capital Allocations 1(j) 54,233 57,219 35,292

----- ----- ----- Acceptance by the Crown Entity of Employee Benefits 1(e)(ii),12 80,177 81,408 48,641

219,199 215,301 207,878 Sale of Goods and Services 1(j), 9 219,199 215,301 207,878

4,496 7,202 4,227 Investment Revenue 1(j),10 5,121 7,202 4,811

44,628 45,297 41,870 Grants and Other Contributions 1(j),11 49,088 45,297 47,645

26,310 14,071 22,589 Other Income 13 27,526 14,071 24,492

1,800,995 1,766,219 1,700,412 Total Revenue 1,887,473 1,847,627 1,757,315

26,918 888 (1,367) Operating Result 26,121 888 (698)

(2,744) (2,289) (225) Gains / (Losses) on Disposal 14 (2,757) (2,289) (248)

(4,891) (770) ----- Impairment Losses on Financial Assets 17 (4,891) (770) -----

----- ----- (7,296) Other Gains / (Losses) 15 ----- ----- (7,296)

19,283 (2,171) (8,888) Net Result 18,473 (2,171) (8,242)

Other Comprehensive Income

Items that will not be reclassified to Net Result in

subsequent periods

547,855 ----- -----

Changes in Revaluation Surplus of Property, Plant and

Equipment 20 554,414 ----- -----

2,494 ----- ----- Changes in Revaluation Surplus of Other Assets 22 2,494 ----- -----

550,349 ----- ----- Total Other Comprehensive Income 556,908 ----- -----

569,632 (2,171) (8,888) TOTAL COMPREHENSIVE INCOME 575,381 (2,171) (8,242)

The accompanying notes form part of these financial statements.


Statement of Comprehensive Income for the year ended 30 June 2019

CONSOLIDATIONPARENT

Actual

Adjusted

Budget

Unaudited Actual Notes Actual

Adjusted

Budget

Unaudited Actual

2019 2019 2018 2019 2019 2018

$000 $000 $000 $000 $000 $000

ASSETS

Current Assets

95,261 65,485 96,820 Cash and Cash Equivalents 16 98,623 68,711 100,047

82,100 74,212 71,574 Receivables 17 82,517 74,969 72,333

13,202 11,513 11,513 Inventories 18 13,202 11,513 11,513

77,447 77,209 77,209 Other Financial Assets 19 99,431 98,126 98,126

268,010 228,419 257,116 Total Current Assets 293,773 253,319 282,019

Non-Current Assets

Property, Plant & Equipment

1,659,627 1,113,167 1,102,962 - Land and Buildings 20 1,673,005 1,120,362 1,110,157

90,291 117,297 91,559 - Plant and Equipment 20 93,699 120,340 94,602

9,773 419 418 - Infrastructure Systems 20 9,773 419 418

1,546 395 395 - Leasehold Improvements 20 1,546 395 395

1,761,237 1,231,278 1,195,334 Total Property, Plant & Equipment 1,778,023 1,241,516 1,205,572

3,828 892 891 Intangible Assets 21 3,828 892 891

8,918 4,653 4,653 Other Non-Current Assets 22 8,918 4,653 4,653

1,773,983 1,236,823 1,200,878 Total Non-Current Assets 1,790,769 1,247,061 1,211,116

2,041,993 1,465,242 1,457,994 Total Assets 2,084,542 1,500,380 1,493,135

LIABILITIES

Current Liabilities

92,586 87,727 83,985 Payables 25 92,865 88,089 84,347

753 732 732 Borrowings 26 753 732 732

314,609 305,045 299,825 Provisions 27 315,171 305,607 300,386

391 255 255 Other Current Liabilities 28 2,747 870 870

408,339 393,759 384,797 Total Current Liabilities 411,536 395,298 386,335

Non-Current Liabilities

5,565 6,318 6,319 Borrowings 26 5,565 6,318 6,319

2,824 2,824 2,370 Provisions 27 2,824 2,824 2,370

8,389 9,142 8,689 Total Non-Current Liabilities 8,389 9,142 8,689

416,728 402,901 393,486 Total Liabilities 419,925 404,440 395,024

1,625,265 1,062,341 1,064,508 Net Assets 1,664,617 1,095,940 1,098,111

EQUITY

911,584 367,318 367,318 Reserves 920,645 369,820 369,820

713,681 695,023 697,190 Accumulated Funds 743,972 726,120 728,291

1,625,265 1,062,341 1,064,508 Total Equity 1,664,617 1,095,940 1,098,111


CONSOLIDATIONPARENT


Statement of Financial Position as at 30 June 2019

PARENT

Accumulated

Funds

Revaluation

Surplus Total

Notes $000 $000 $000

Balance at 1 July 2018 697,190 367,318 1,064,508

Changes in Accounting Policy 1ah)(i) 939 ----- 939

Restated balance at 1 July 2018 698,129 367,318 1,065,447

Net Result for the Year 19,283 ----- 19,283

Other Comprehensive Income:

Net Change in Revaluation Surplus of Property, Plant and Equipment 20 ----- 547,855 547,855

Net Change in Revaluation Surplus of Other Assets 22 ----- 2,494 2,494

Reclassification of revaluation increments / (decrements) to accumulated funds on disposal

of assets 6,083 (6,083) -----

Total Other Comprehensive Income 6,083 544,266 550,349

Total Comprehensive Income for the Year 25,366 544,266 569,632

Transactions With Owners In Their Capacity As Owners

Increase / (Decrease) in Net Assets From Equity Transfers 37 (9,814) ----- (9,814)

Balance at 30 June 2019 713,681 911,584 1,625,265

Balance at 1 July 2017 706,078 367,318 1,073,396

Changes in Accounting Policy ----- ----- -----


Net Result for the Year (8,888) ----- (8,888)


Net Change in Revaluation Surplus of Property, Plant and Equipment 20 ----- ----- -----

Net Change in Revaluation Surplus of Other Assets 22 ----- ----- -----

Available for Sale Financial Assets:

Reclassification of revaluation increments / (decrements) to accumulated funds on disposal

of assets ----- ----- -----

Total Other Comprehensive Income ----- ----- -----

Total Comprehensive Income for the Year (8,888) ----- (8,888)


Increase/(Decrease) in Net Assets From Equity Transfers 37 ----- ----- -----

Balance at 30 June 2018 697,190 367,318 1,064,508



Statement of Changes in Equity for the year ended 30 June 2019

CONSOLIDATION

Accumulated

Funds

Revaluation

Surplus Total

Notes $000 $000 $000

Balance at 1 July 2018 728,291 369,820 1,098,111

Changes in Accounting Policy 1ah)(i) 939 ----- 939


Net Result for the Year 18,473 ----- 18,473


Net Change in Revaluation Surplus of Property, Plant and Equipment 20 ----- 554,414 554,414

Net Change in Revaluation Surplus of Other Assets 22 ----- 2,494 2,494

Reclassification of revaluation increments / (decrements) to accumulated funds on

disposal of assets 6,083 (6,083) -----

Total Other Comprehensive Income 6,083 550,825 556,908

Total Comprehensive Income for the Year 24,556 550,825 575,381


Increase/(Decrease) in Net Assets From Equity Transfers 37 (9,814) ----- (9,814)

Balance at 30 June 2019 743,972 920,645 1,664,617

Balance at 1 July 2017 736,533 369,820 1,106,353

Changes in Accounting Policy ----- ----- -----


Net Result for the Year (8,242) ----- (8,242)


Net Change in Revaluation Surplus of Property, Plant and Equipment 20 ----- ----- -----

Net Change in Revaluation Surplus of Other Assets 22 ----- ----- -----

Available for Sale Financial Assets:

Reclassification of revaluation increments / (decrements) to accumulated funds on

disposal of assets ----- ----- -----

Total Other Comprehensive Income ----- ----- -----

Total Comprehensive Income for the Year (8,242) ----- (8,242)


Increase/(Decrease) in Net Assets From Equity Transfers 37 ----- ----- -----

Balance at 30 June 2018 728,291 369,820 1,098,111



Statement of Changes in Equity for the year ended 30 June 2019

Actual Adjusted

Budget

Unaudited

Actual Notes Actual Adjusted

Budget

Unaudited

Actual

2019 2019 2018 2019 2019 2018

$000 $000 $000 $000 $000 $000

CASH FLOWS FROM OPERATING ACTIVITIES

Payments

----- ----- ----- Employee Related (1,100,884) (1,102,579) (1,052,470)

(640,937) (641,768) (639,479) Suppliers for Goods and Services (643,639) (642,386) (643,098)

(37,993) (36,146) (36,497) Grants and Subsidies (38,218) (36,192) (36,748)

(200) (103) (229) Finance Costs (200) (103) (229)

(1,097,033) (1,102,566) (1,048,935) Other ----- ----- -----

(1,776,163) (1,780,583) (1,725,140) Total Payments (1,782,941) (1,781,260) (1,732,545)

Receipts

1,452,129 1,427,129 1,388,556 NSW Ministry of Health Recurrent Allocations 1,452,129 1,427,129 1,388,556

54,233 57,219 35,292 NSW Ministry of Health Capital Allocations 54,233 57,219 35,292

----- ----- ----- Reimbursements from the Crown Entity 18,042 18,042 17,551

210,335 218,939 211,288 Sale of Goods and Services 210,565 218,948 211,365

4,443 7,202 4,177 Interest Received 5,069 7,202 4,761

65,876 66,962 62,969 Grants and Other Contributions 52,693 49,320 51,724

78,238 66,136 73,956 Other 81,369 66,403 76,525

1,865,254 1,843,587 1,776,238 Total Receipts 1,874,100 1,844,263 1,785,774

89,091 63,004 51,098 NET CASH FLOWS FROM OPERATING ACTIVITIES 31 91,159 63,003 53,229

CASH FLOWS FROM INVESTING ACTIVITIES

37 ----- 155 Proceeds from Sale of Property, Plant & Equipment and Intangibles 37 ----- 155

153,838 153,838 153,953 Proceeds from Sale of Financial Assets 196,745 196,745 154,953

(89,255) (94,339) (53,990) Purchases of Property, Plant & Equipment and Intangibles (90,122) (94,339) (55,027)

(154,538) (153,838) (154,857) Purchases of Financial Assets (198,511) (196,745) (156,864)

(89,918) (94,339) (54,739) NET CASH FLOWS FROM INVESTING ACTIVITIES (91,851) (94,339) (56,783)

CASH FLOWS FROM FINANCING ACTIVITIES

----- ----- 792 Proceeds from Borrowings and Advances ----- ----- 792

(732) ----- (690) Repayment of Borrowings and Advances (732) ----- (690)

(732) ----- 102 NET CASH FLOWS FROM FINANCING ACTIVITIES (732) ----- 102

(1,559) (31,335) (3,539)

NET INCREASE / (DECREASE) IN CASH AND CASH

EQUIVALENTS (1,424) (31,336) (3,452)

96,820 96,820 100,359 Opening Cash and Cash Equivalents 16 100,047 100,047 103,499

95,261 65,485 96,820 CLOSING CASH AND CASH EQUIVALENTS 16 98,623 68,711 100,047



Statement of Cash Flows for the year ended 30 June 2019

CONSOLIDATIONPARENT

1. Statement of Significant Accounting Policies

a)

*

*

*

b)

*

*

*

c)

d)

The financial statements of SLHD have been prepared on a going concern basis.

The Secretary of Health, the Chair of Sydney Local Health District Board and the Chief Executive, through the Service Agreement have agreed to service and funding levels for the forward financial

year. The Service Agreement sets out the level of financial resources for public health services under SLHD's control and the source of these funds. By agreement, the Service Agreement requires

local management to control its financial liquidity and in particular meet benchmarks for the payment of creditors. Where SLHD fails to meet Service Agreement performance standards, the NSW

Ministry of Health as the state manager can take action in accordance with annual performance framework requirements, including financial support and increased management interaction by the

NSW Ministry of Health.

Other circumstances why the going concern assumption is appropriate include:

The financial statements and notes comply with Australian Accounting Standards which include Australian Accounting Interpretations.

As a consequence the values in the financial statements presented herein consist of the parent entity and the consolidated entity which comprises the Parent, Special Purpose Service Entity and the

Anzac Health and Medical Research Foundation. In the process of preparing the consolidated financial statements consisting of the controlling and controlled entities, all inter-entity transactions and

balances have been eliminated and like transactions and other events are accounted for using uniform accounting policies.

These consolidated financial statements for the year ended 30 June 2019 were authorised for issue by the Chief Executive on 3 September 2019.

SLHD's financial statements are general purpose financial statements which have been prepared on an accrual basis and in accordance with applicable Australian Accounting Standards (AAS)

(which include Australian Accounting Interpretations), the requirements of the Health Services Act 1997 and its regulations (including observation of the Accounts and Audit Determination for Public

Health Organisations), the Public Finance and Audit Act 1983 (the Act) and the Public Finance and Audit Regulation 2015, and the NSW Treasurer's Directions issued under the Act. The financial

statements comply with the NSW Treasury mandates circular for NSW General Government Sector Entities.

The Reporting Entity

Sydney Local Health District (SLHD) was established under the provisions of the Health Services Act 1997 with effect from 1 January 2011.


Notes to and forming part of the Financial Statements

for the year ended 30 June 2019

SLHD, as a reporting entity, comprises all the entities under its control, namely:

SLHD has the capacity to review timing of subsidy cash flows to ensure that debts can be paid when they become due and payable.

SLHD has developed an Efficiency Improvement Plan (EIP) which identifies revenue improvement and cost saving strategies. Benefits from the EIP are retained by SLHD and assist in

meeting its overall budget target. The EIP is monitored and evaluated by the NSW Ministry of Health throughout the financial year.

Allocated funds, combined with other revenues earned, are applied to pay debts as and when they become due and payable.

Property, plant and equipment, assets held for sale and certain financial assets and liabilities are measured at fair value. Other financial statement items are prepared in accordance with the

historical cost convention except where specified otherwise.

Judgements, key assumptions and estimations management has made are disclosed in the relevant notes to the financial statements.

All amounts are rounded to the nearest one thousand dollars and are expressed in Australian currency, which is SLHD's presentation and functional currency.

SLHD is a NSW Government entity and is controlled by the NSW Ministry of Health, which is the immediate parent. The reporting entity is also controlled by the State of New South Wales (and is

consolidated as part of the NSW Total State Sector Accounts), which is the ultimate parent. The reporting entity is a not-for-profit entity as profit is not its principal objective.

The parent entity, comprises all the operating activities of the Hospital Facilities and the Community Health Centres under its control. It also encompasses the Restricted Assets (as disclosed

in note 24), which, while containing assets which are restricted for specified uses by the grantor or the donor, are nevertheless controlled by the parent entity.

Sydney Local Health District Special Purpose Service Entity which was established as a Division of the SLHD on 1 January 2011 in accordance with the Health Services Act 1997. This

Division provides personnel services to enable SLHD to exercise its functions.

Comparative Information

Except when an Australian Accounting Standard permits or requires otherwise, comparative information is disclosed in respect of the previous period for all amounts reported in the financial

statements.

Statement of Compliance

Basis of Preparation

The Anzac Health and Medical Research Foundation, which conducts medical research on the Concord Hospital campus.





e)

i)

ii)

iii)

iv)

f)

g)

h)

i)

Insurance

Finance Costs

Grant and subsidies expense generally comprise contributions in cash or in kind to various local government authorities and not-for-profit community organisations to support their health-related

objectives and activities. The grant and subsidies are expensed on the transfer of the cash or assets. The transferred assets are measured at their fair value.

Payments to Affiliated Health Organisations

Annual leave and ADO are not expected to be settled wholly before 12 months after the end of the annual reporting period in which the employees render the related service. As such, they

are required to be measured at present value in accordance with AASB 119 Employee Benefits (although short-cut methods are permitted).

Actuarial advice obtained by NSW Treasury, a controlled entity of the ultimate parent, has confirmed that using the nominal annual leave balance plus the annual leave entitlements accrued

while taking annual leave can be used to approximate the present value of the annual leave liability. On-costs of 18.0% are applied to the value of leave payable at 30 June 2019 (comparable

on-costs for 30 June 2018 were 17.9%). SLHD has assessed the actuarial advice based on the SLHD’s circumstances to both the annual leave and ADO and has determined that the effect of

discounting is immaterial. All annual leave and ADO are classified as a current liability even where the consolidated entity does not expect to settle the liability within 12 months as the

consolidated entity does not have an unconditional right to defer settlement.

Unused non-vesting sick leave does not give rise to a liability as it is not considered probable that sick leave taken in the future will be greater than the benefits accrued in the future.

Consequential On-Costs

Other Provisions

SLHD's liability for long service leave and defined benefit superannuation (State Authorities Superannuation Scheme and State Superannuation Scheme) are assumed by the Crown Entity,

which is a controlled entity of the ultimate parent.

SLHD accounts for the liability as having been extinguished, resulting in the amount assumed being shown as part of the non-monetary revenue item described as 'Acceptance by the Crown

Entity of Employee Benefits'.

Specific on-costs relating to Long Service Leave assumed by the Crown Entity are borne by SLHD as shown in Note 27.

Long service leave is measured at the present value of expected future payments to be made in respect of services provided up to the reporting date. Consideration is given to certain factors

based on actuarial review, including expected future wage and salary levels, experience of employee departures, and periods of service. Expected future payments are discounted using the

long-term Commonwealth Government bond rate at the reporting date.

The superannuation expense for the financial year is determined by using the formulae specified in the Treasurer’s Directions. The expense for certain superannuation schemes (i.e. Basic

Benefit and First State Super) is calculated as a percentage of the employee's salary. For other superannuation schemes (i.e. State Superannuation Scheme and State Authorities

Superannuation Scheme), the expense is calculated as a multiple of the employee's superannuation contributions.

Employee Benefits and Other Provisions

Salaries and wages (including non-monetary benefits) and paid sick leave that are expected to be settled wholly within 12 months after the end of the period in which the employees render the

service are recognised and measured at the undiscounted amounts of the benefits.

Payments to non-government affiliated health organisations generally comprise contributions in cash or in kind. Non-goverment affiliated health organsations support the NSW Minstry of Health's role

of 'system manager' in relation to the NSW public health system. The payments are expensed on the transfer of the cash or assets. The transferred assets are measured at their fair value.

Consequential costs to employment are recognised as liabilities and expenses where the employee benefits to which they relate have been recognised. This includes outstanding amounts of

workers’ compensation insurance premiums and fringe benefits tax.

Finance costs consist of interest and other costs incurred in connection with the borrowing of funds. Borrowing costs are recognised as expenses in the period in which they are incurred, in

accordance with NSW Treasury’s mandate to not-for-profit NSW General Government Sector entities.

SLHD's insurance activities are conducted through the NSW Treasury Managed Fund (TMF) Scheme of self insurance for government entities. The expense (premium) is determined by the Fund

Manager based on past claims experience. The TMF is managed by Insurance and Care NSW (iCare), a controlled entity of the ultimate parent.

Grants and Subsidies

Salaries and Wages, Annual Leave, Sick Leave, Allocated Days Off (ADO) and On-Costs

Long Service Leave and Superannuation

Other provisions are recognised when SLHD has a present legal or constructive obligation as a result of a past event; it is probable that an outflow of resources will be required to settle the

obligation; and a reliable estimate can be made of the amount of the obligation.





j)

*

*

k)

Refer to Note 9(b) for further details.

Highly Specialised Drugs

Income Recognition

Sale of Goods

Rendering of Services

Payments are made by the immediate parent on the basis of the allocation for SLHD as adjusted for approved supplementations mostly for salary agreements and approved enhancement projects.

General operating expenses/revenues of $12.741 million relating to the operation of Affiliated Health Organisation (Tresillian and Scarba) have only been included in the Statement of

Comprehensive Income to the extent of the cash payments made to the Health Organisations concerned. SLHD is not deemed to own or control the various assets/liabilities of the aforementioned

Health Organisations and such amounts have been excluded from the Statement of Financial Position. Any exceptions are specifically listed in the notes that follow.

Other income includes lease income from operating leases where SLHD is the lessor. Income is recognised on a straight-line basis over the lease term.

Income is measured at the fair value of the consideration or contribution received or receivable. Additional comments regarding the accounting policies for the recognition of revenue are discussed

below.

Use of Outside Facilities

Motor Accident Authority Third Party

Revenue is recognised when the service is provided or by reference to the stage of completion (based on labour hours incurred to date).

Patient fees are derived from chargeable inpatients and non-inpatients on the basis of rates specified by the NSW Ministry of Health. Revenue is recognised on an accrual basis when the service

has been provided to the patient.

Revenue for highly specialised drugs is paid by the Commonwealth in accordance with the terms of the Commonwealth agreement through Medicare and reflects the recoupment of costs incurred

under Section 100 of the National Health Act 1953 for highly specialised drugs. The agreement provides for the provision of medicines for the treatment of chronic conditions where specific criteria

are met in respect of day admitted patients, non admitted patients or patients on discharge. Revenue is recognised when the drugs have been provided to the patient.

Use of Hospital Facilities

Grants and Other Contributions

Grants and other contributions, comprising mainly cash and in-kind contributions, are recognised as revenues when control passes to SLHD and the contractual obligations have been satisfied. In-

kind contributions are measured at fair value on transfer date.

Specialist doctors with rights of private practice are subject to an infrastructure charge including service charges where applicable for the use of hospital facilities at rates determined by the NSW

Ministry of Health. Charges consist of two components:

SLHD uses a number of facilities owned and maintained by the local authorities in the area to deliver community health services for which no charges are raised by the authorities.

Income, expenses and assets are recognised net of the amount of GST, except that the:

Investment Revenue

A bulk billing agreement exists in which motor vehicle insurers effect payment directly to NSW Health for the hospital costs for those persons hospitalised or attending for inpatient treatment as a

result of motor vehicle accidents. SLHD recognises the revenue on an accrual basis from the time the patient is treated or admitted into hospital.

The gross amount of a liability forgiven by a credit provider shall be recognised by the borrower as other income.

Patient Fees

Department of Veterans' Affairs

a monthly charge raised by SLHD based on a percentage of receipts generated.

the residual of the Private Practice Trust Fund at the end of each financial year, such sum being credited for SLHD use in the advancement of SLHD or individuals within it.

Forgiveness of Liabilities

Where material, the cost method of accounting is used for the initial recording of all such services. Cost is determined as the fair value of the services given and is then recognised as revenue with a

matching expense.

Other Income

This allocation is included in the Statement of Comprehensive Income before arriving at the 'Net Result' on the basis that the allocation is earned in return for the health services provided on behalf

of the NSW Ministry of Health. Allocations are normally recognised upon the receipt of cash.

NSW Ministry of Health Allocations

Accounting for the Goods & Services Tax (GST)

An agreement is in place with the Commonwealth Department of Veterans' Affairs through which direct funding is provided for the provision of health services to entitled veterans. For inpatient

services, revenue is recognised by SLHD on an accrual basis by reference to patient admissions. Non admitted patients are recognised by the NSW Ministry of Health in the form of a block grant.

Interest revenue is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for financial assets that subsequently become credit impaired. For

financial assets that become credit impaired the effective interest rate is applied to the amortised cost of the financial asset (i.e. after deducting the loss allowance for expected credit losses).

Revenue from the sale of goods is recognised as revenue when SLHD transfers the significant risks and rewards of ownership of the goods, usually on delivery of the goods.





*

*

l)

m)

n) Depreciation of Property, Plant and Equipment

2019 2018

2.5% 2.5%

10.0% 10.0%

2.5% 2.5%

Plant and Equipment

20% 20%

10% 10%

12.5% 12.5%

5% 5%

25% 25%

12.5% 12.5%

20% 20%

10% 10%

10% 10%

4% 4%

Where payment for an asset is deferred beyond normal credit terms, its cost is the cash price equivalent, i.e. the deferred payment amount is effectively discounted over the period of credit.

- Electro Medical Equipment

Infrastructure Systems

Leasehold Improvements

- Motor Vehicle Sedans

* Costing more than or equal to $200,000

- Furniture, Fittings and Furnishings

- Motor Vehicles, Trucks & Vans

Land and buildings are owned by the Health Administration Corporation. Land and buildings which are operated/occupied by SLHD are deemed to be controlled by SLHD and are reflected as such

in the financial statements.

Property, plant and equipment acquired are initially recognised at cost and subsequently revalued at fair value less accumulated depreciation and impairment. Cost is the amount of cash or cash

equivalents paid or the fair value of the other consideration given to acquire the asset at the time of its acquisition or construction or, where applicable, the amount attributed to that asset when

initially recognised in accordance with the requirements of other Australian Accounting Standards.

Acquisition of Property, Plant and Equipment

Buildings

- Office Equipment

- Plant and Machinery

*Buildings - Leasehold

- Linen

* Costing less than $200,000

Cash flows are included in the Statement of Cash Flows on a gross basis. However, the GST components of cash flows arising from investing and financing activities which are recoverable from, or

payable to, the Australian Taxation Office are classified as operating cash flows.

Depreciation rates are subsequently varied where changes occur in the assessment of the remaining useful life of the assets reported.

Assets acquired at no cost, or for nominal consideration, are initially recognised at their fair value at the date of acquisition. Refer to Note 1(ac) for assets transferred as a result of equity transfer.

Fair value is the price that would be received to sell an asset in an orderly transaction between market participants at measurement date.

Capitalisation Thresholds

Details of depreciation rates initially applied for major asset categories are as follows:

'Infrastructure Systems' means assets that comprise public facilities and which provide essential services and enhance the productive capacity of the economy including roads, bridges, water

infrastructure and distribution works, sewerage treatment plants, seawalls and water reticulation systems.

- Computer Equipment

Health Administration Corporation, a controlled entity of the immediate parent, manages the approved major capital works program for the NSW Ministry of Health and its controlled entities. Health

Administration Corporation receives NSW Ministry of Health Capital Allocations and grants on behalf of SLHD and makes payments to contractors and suppliers. Health Administration Corporation

initially records all costs incurred as work in progress or expenses and subsequently transfers to SLHD. The costs are then accordingly reflected in SLHD financial statements. SLHD acquires most

assets in this manner.

amount of GST incurred by SLHD as a purchaser that is not recoverable from the Australian Taxation Office is recognised as part of an asset's cost of acquisition or as part of an item of

expense; and

receivables and payables are stated with the amount of GST included.

Property, plant and equipment and Intangibles costing $10,000 and above individually (or forming part of a network costing more than $10,000) are capitalised.

Depreciation is provided for on a straight-line basis for all depreciable assets so as to write off the depreciable amount of each asset as it is consumed over its useful life to SLHD. Land is not a

depreciable asset. All material identifiable components of assets are depreciated over their useful lives.





o) Revaluation of Non-Current Assets

p) Impairment of Property, Plant and Equipment

q) Restoration Costs

r) Intangible Assets

s) Maintenance

SLHD recognises intangible assets only if it is probable that future economic benefits will flow to SLHD and the cost of the asset can be measured reliably. Intangible assets are measured initially at

cost.

To ensure that the carrying amount for each asset does not differ materially from its fair value at reporting date, indices are sourced. The indices reflect an assessment of movements made in the

period between revaluations.

Computer software developed or acquired by SLHD is recognised as an intangible asset and is amortised over four years using the straight line method based on the useful life of the asset for both

internally developed assets and direct acquisitions. Most computer software is acquired from the Health Administration Corporation, a controlled entity of the immediate parent.

The useful lives of intangible assets are assessed to be finite.

Physical non-current assets are valued in accordance with the 'Valuation of Physical Non-Current Assets at Fair Value' Policy and Guidelines Paper (TPP 14-01). This policy adopts fair value in

accordance with AASB 13 Fair Value Measurement, AASB 116 Property, Plant and Equipment and AASB 140 Investment Property.

SLHD revalues land and buildings at a minimum of every three years by independent valuation and with sufficient regularity to ensure that the carrying amount of each asset does not differ materially

from its fair value at reporting date. The last revaluation for assets held by SLHD as at 30 June 2019 was completed in December 2018 and was based on an independent assessments.

Revaluation decrements are recognised immediately as a loss in the net result, except to the extent that it offsets an existing revaluation surplus on the same class of assets, in which case, the

decrement is debited directly to the revaluation surplus.

Revaluation increments are recognised in other comprehensive income and credited to revaluation surplus in equity. However, to the extent that an increment reverses a revaluation decrement in

respect of the same class of asset previously recognised as a loss in the net result, the increment is recognised immediately as a gain in the net result.

Fair value of property, plant and equipment is based on a market participants’ perspective, using valuation techniques (market approach, cost approach, income approach) that maximise relevant

observable inputs and minimise unobservable inputs. Also refer Note 20 and Note 23 for further information regarding fair value.

Day-to-day servicing costs or maintenance are charged as expenses as incurred except where they relate to the replacement of a part or component of an asset, in which case the costs are

capitalised and depreciated.

Intangible assets are subsequently measured at fair value only if there is an active market. As there is no active market for SLHD's intangible assets, the assets are carried at cost less any

accumulated amortisation and impairment losses.

Property, plant and equipment is measured at the highest and best use by market participants that is physically possible, legally permissible and financially feasible. The highest and best use must

be available at a period that is not remote and takes into account the characteristics of the asset being measured, including any socio-political restrictions imposed by government. In most cases,

after taking into account these considerations, the highest and best use is the existing use. In limited circumstances, the highest and best use may be a feasible alternative use, where there are no

restrictions on use or where there is a feasible higher restricted alternative use.

The present value of the expected cost for the restoration or cost of dismantling of an asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met.

When revaluing non-current assets using the cost approach, the gross amount and the related accumulated depreciation are separately restated.

For other assets valued using other valuation techniques, any balances of accumulated depreciation existing at the revaluation date in respect of those assets are credited to the asset accounts to

which they relate. The net asset accounts are then increased or decreased by the revaluation increments or decrements.

Non-specialised assets with short useful lives are measured at depreciated historical cost, as an approximation of fair value. SLHD has assessed that any difference between fair value and

depreciated historical cost is unlikely to be material.

As a not-for-profit entity, revaluation increments and decrements are offset against one another within a class of non-current assets, but not otherwise.

Where an asset that has previously been revalued is disposed of, any balance remaining in the revaluation surplus in respect of that asset is transferred to accumulated funds.

As a not-for-profit entity with no cash generating units, impairment under AASB 136 Impairment of Assets is unlikely to arise. As property, plant and equipment is carried at fair value or an amount

that approximates fair value, impairment can only arise in the rare circumstances such as where the costs of disposal are material. Specifically, impairment is unlikely for not-for-profit entities given

that AASB 136 Impairment of Assets modifies the recoverable amount test for non-cash generating assets of not-for-profit entities to the higher of fair value less costs of disposal and depreciated

replacement cost, where depreciated replacement cost is also fair value.

The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period.

Intangible assets are tested for impairment where an indicator of impairment exists. If the recoverable amount is less than its carrying amount, the carrying amount is reduced to recoverable amount

and the reduction is recognised as an impairment loss.

Where an asset is acquired at no or nominal cost, the cost is its fair value as at the date of acquisition. All research costs are expensed. Development costs are only capitalised when certain criteria

are met.





t) Leased Assets

u) Inventories

v) Receivables

w) Financial Assets at Fair Value

A gain or loss on a financial asset that is subsequently measured at fair value through profit or loss is recognised in net results and presented net within other gains / (losses), except for TCorpIM

Funds that are presented in ‘investment revenue’ in the period in which it arises.

Classification and measurement under AASB 9 (from 1 July 2018)

All ‘regular way’ purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require

delivery of assets within the time frame established by regulation or convention in the marketplace.

Where a non-current asset is acquired by means of a finance lease, at the commencement of the lease term, the asset is recognised at its fair value or, if lower, the present value of the minimum

lease payments, at the inception of the lease. The corresponding liability is established at the same amount. Lease payments are allocated between the principal component and the interest

expense.

Operating lease payments are recognised as an expense on a straight-line basis over the lease term.

As a lessee:

Recognition and Measurement

A distinction is made between finance leases which effectively transfer from the lessor to the lessee substantially all the risks and rewards incidental to ownership of the leased assets, and operating

leases under which the lessor effectively retains all such risks and rewards.

SLHD, as the lessor, classifies its leases as finance leases if it transfers to the lessee substantially all the risks and rewards incidental to ownership of the leased asset. The leased assets are

recognised as current and non-current receivables at amounts equal to the net investment in the lease.

Obsolete items are disposed of in accordance with instructions issued by the NSW Ministry of Health.

Inventories held for distribution are stated at cost, adjusted when applicable, for any loss of service potential. Inventories other than those held for distribution are stated at the lower of cost and net

realisable value. Cost is calculated using the weighted average cost method.

Other financial assets are initially measured at fair value plus any transaction costs. Other financial assets include intra health loans and deposits with a maturity of three months or more.

Classification and measurement under AASB 139 Financial Instruments: Recognition and Measurement (for comparative period ended 30 June 2018)

Loans and receivables are subsequently measured at amortised cost using the effective interest method, less any impairment. Changes are recognised in the net result for the year when impaired,

derecognised or though the amortisation process.

Amounts due from lessees under finance leases are classified at amortised cost and recognised at the amount of SLHD’s net investment in the lease. Finance lease income is allocated to

accounting periods so as to reflect a constant periodic rate of return on SLHD’s net investment outstanding in respect of the leases.

Short-term receivables with no stated interest rate are measured at the original invoice amount where the effect of discounting is immaterial.

As a lessor:

Subsequent measurement under AASB 9 Financial Instruments (from 1 July 2018)

SLHD holds receivables with the objective to collect the contractual cash flows and therefore measures them at amortised cost using the effective interest method, less any impairment. Changes are

recognised in the net result for the year when impaired, derecognised or through the amortisation process.

Amounts due from lessees under finance leases are classified as loans and receivables and recognised at the amount of the consolidated entity’s net investment in the lease. Finance lease income

is allocated to accounting periods so as to reflect a constant periodic rate of return on the consolidated entity’s net investment outstanding in respect of the leases.

Other financial assets are classified and subsequently measured at amortised cost as they are held for collection of contractual cash flows solely representing payments of principal and interest.

Impairment losses are presented as separate line item in the statement of comprehensive income. Any gain or loss arising on derecognition is recognised directly in net results and presented in

other gains / (losses) together with foreign exchange gains and losses.

Lease payments relating to the period, excluding costs for services, are applied against the gross investment in the lease to reduce both the principal and the unearned finance income.

All ‘regular way’ purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require

delivery of assets within the time frame established by regulation or convention in the marketplace.

Receivables are initially recognised at fair value plus any directly attributable transaction costs. Trade receivables that do not contain a significant financing component are measured at the

transaction price.

SLHD's financial assets at fair value are classified, at fair value through profit or loss. The classification was based on the purpose of acquiring such assets.

Transaction costs of financial assets carried at fair value through profit or loss are expensed in net results.

Financial assets with cash flows that are not solely payments of principal and interest are classified and measured at fair value through profit or loss, irrespective of the business model. TCorpIM

Funds are managed and their performance is evaluated on a fair value basis and therefore the business model is neither to hold to collect contractual cash flows or sell the financial asset. Hence

these investments are mandatorily required to be measured at fair value through profit or loss.

Notwithstanding the criteria to be classified at amortised cost or at fair value through other comprehensive income, financial assets may be designated at fair value through profit or loss on initial

recognition if doing so eliminates, or significantly reduces, an accounting mismatch.





*

*

*

x) Impairment of Financial Assets

Classification and measurement under AASB 139 (for comparative period ended 30 June 2018)

These investments are measured at amortised cost using the effective interest method less any impairment. Changes are recognised in the net result for the year when impaired, derecognised

or through the amortisation process.

TCorpIM Funds investments are made in an effort to improve interest returns on cash balances otherwise available whilst also providing secure investments.

TCorpIM Funds investment facilities are managed by New South Wales Treasury Corporation, a controlled entity of the ultimate parent. The facilities are designated at fair value through profit

or loss as the management and performance of these financial assets is undertaken on a fair value basis, in accordance with a documented risk management strategy. Information about these

assets is provided internally to SLHD's key management personnel.

Other Financial Assets

ECLs are recognised in two stages. For credit exposures where there has not been a significant increase in credit risk since initial recognition, ECLs are based on default events possible within the

next 12-months (i.e. a 12-month ECL). If there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of

the exposure, irrespective of the timing of the default (i.e. a lifetime ECL). In addition, SLHD considers that there has been a significant increase in credit risk when contractual payments are more

than 30 days past due.

SLHD term deposits are issued by financial institutions that have strong credit ratings and therefore considered to be low credit risk investments. Hence SLHD measures the loss allowance for term

deposits at an amount equal to 12-month ECL. However, when there is a significant increase in credit risk since origination, the allowance will be based on the lifetime ECL.

SLHD uses the ratings from external credit rating agencies both to determine whether there has been a significant increase in credit risk on the deposits and to estimate ECLs. These estimates are

performed at every reporting date.

Impairment of available-for-sale financial assets under AASB 139 (for the comparative period ended 30 June 2018)

For financial assets carried at amortised cost, the amount of the allowance is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at

the effective interest rate. The amount of the impairment loss is recognised in the net result for the year.

Purchases or sales of investments under contract that require delivery of the asset within the timeframe established by convention or regulation are recognised on the trade date; i.e. the date SLHD

commits to purchase or sell the asset.

All financial assets, except those measured at fair value through profit or loss, are subject to an annual review for impairment. An allowance for impairment is established when there is objective

evidence that SLHD will not be able to collect all amounts due, as a result of one or more events that occurred after the initial recognition of the asset, the estimated cash flows have been affected.

Impairment under AASB 9 (from 1 July 2018)

SLHD recognises an allowance for expected credit losses (ECLs) for all debt financial assets not held at fair value through profit or loss. ECLs are based on the difference between the contractual

cash flows and the cash flows that SLHD expects to receive, discounted at the original effective interest rate.

Receivables

For trade receivables, SLHD applies a simplified approach in calculating ECLs. SLHD recognises a loss allowance based on lifetime ECLs at each reporting date. SLHD has established a provision

matrix based on its historical credit loss experience for trade receivables, adjusted for forward looking factors specific to the receivable.

For lease receivables, SLHD applies the simplified approach permitted by AASB 9, where the loss allowance is based on lifetime ECLs.

The movement in the fair value of the TCorpIM Funds investments incorporates distributions received as well as unrealised movements in fair value and is reported in the line item ‘investment

revenue’.

Held-to-maturity investments – Non-derivative financial assets with fixed or determinable payments and fixed maturity that SLHD has the positive intention and ability to hold to maturity are

classified as 'held-to-maturity'.

The fair value of investments that are traded at fair value in an active market is determined by reference to quoted current bid prices at the close of business on the Statement of Financial Position

date.

The risk management strategy of SLHD has been developed consistent with the investment powers granted under the provision of the Public Authorities (Financial Arrangements) Act 1987.

SLHD subsequently measures investments classified as 'held for trading' or designated upon initial recognition “at fair value through profit or loss” at fair value.

Financial assets are classified as 'held for trading' if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives are also classified as held for trading. Gains or

losses on these assets are recognised in the net result for the year.

Investments are initially recognised at fair value plus, in the case of investments not at fair value through profit or loss, transaction costs. SLHD determines the classification of its financial assets

after initial recognition and when allowed and appropriate, re-evaluates this at each financial year end.

For certain categories of financial assets, such as trade receivables,SLHD first assesses whether impairment exists individually for financial assets that are individually significant, or collectively for

financial assets that are not individually significant. Further, receivables are assessed for impairment on a collective basis if they were assessed not to be impaired individually.

Available-for-sale investments - Any investments that do not fall into any other category are accounted for as available-for-sale investments and measured at fair value. Gains or losses on

available-for-sale investments are recognised in other comprehensive income until disposed or impaired, at which time the cumulative gain or loss previously recognised in other

comprehensive income is recognised in the net result for the year. However, interest calculated using the effective interest method and dividends are recognised in the net result for the year.

Any reversals of impairment losses are reversed through the net result for the year, where there is objective evidence. Reversals of impairment losses of financial assets carried at amortised cost

cannot result in a carrying amount that exceeds what the carrying amount would have been had there not been an impairment loss.





y) De-recognition of Financial Assets and Financial Liabilities

*

*

z) Payables

aa) Borrowings

ab) Fair Value Hierarchy

*

*

*

ac) Equity Transfers

ad) Equity and Reserves

(i)

(ii)

ae) Trust Funds

As SLHD performs only a custodial role in respect of these monies, and because the monies cannot be used for the achievement of SLHD's own objectives, these funds are not recognised in the

financial statements.

The revaluation surplus is used to record increments and decrements on the revaluation of non-current assets. This accords with SLHD's policy on the revaluation of property, plant and

equipment as discussed in Note 1(o).

Finance lease liabilities are determined in accordance with AASB 117 Leases.

SLHD recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

Refer to Note 23 and Note 38 for further disclosures regarding fair value measurements of non-financial and financial assets.

SLHD has neither transferred nor retained substantially all the risks and rewards for the asset, but has transferred control.

Subsequent measurement is at amortised cost using the effective interest method. Short-term payables with no stated interest rate are measured at the original invoice amount where the effect of

discounting is immaterial.

SLHD has transferred substantially all the risks and rewards of the asset; or

A financial liability is derecognised when the obligation specified in the contract is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender

on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the

recognition of a new liability. The difference in the respective carrying amounts is recognised in the net result.

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when the contractual rights to the cash flows from the financial assets

expire; or if the entity transfers its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a pass

through arrangement and either:

SLHD receives monies in a trustee capacity for various trusts as set out in Note 30.

Level 2 – inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly.

Payables are recognised for amounts to be paid in the future for goods and services received, whether or not billed to SLHD.

Borrowings classified as financial liabilities at amortised cost are initially measured at fair value, net of directly attributable transaction costs. These are subsequently measured at amortised cost

using the effective interest method. Gains and losses are recognised in net result when the liabilities are derecognised as well as through the amortisation process.

Borrowings are classified as current liabilities unless the consolidated entity has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Refer to Note

1y) for derecognition policy.

Level 1 – quoted (unadjusted) prices in active markets for identical assets / liabilities that the entity can access at the measurement date.

A number of SLHD’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. When measuring fair value, the valuation

technique used maximises the use of relevant observable inputs and minimises the use of unobservable inputs. Under AASB 13 Fair Value Measurement, SLHD categorises, for disclosure

purposes, the valuation techniques based on the inputs used in the valuation techniques as follows:

These amounts represent liabilities for goods and services provided to SLHD and other amounts. Payables are recognised initially at fair value, net of directly attributable transaction costs.

Level 3 – inputs that are not based on observable market data (unobservable inputs).

All other equity transfers are recognised at fair value, except for intangibles. Where an intangible has been recognised at (amortised) cost by the transferor because there is no active market, SLHD

recognises the asset at the transferor's carrying amount. Where the transferor is prohibited from recognising internally generated intangibles, SLHD does not recognise that asset.

When SLHD has transferred its rights to receive cash flows from an asset or has entered into a pass through arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of

ownership. Where SLHD has neither transferred nor retained substantially all the risks and rewards or transferred control, the asset continues to be recognised to the extent of SLHD continuing

involvement in the asset. In that case, SLHD also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations

that the entity has retained.

The transfer of net assets between entities as a result of an administrative restructure, transfers of programs/functions and parts thereof between entities controlled by the ultimate parent are

recognised as an adjustment to 'Accumulated Funds'. This treatment is consistent with AASB 1004 'Contributions' and Australian Accounting Interpretation 1038 'Contributions by Owners Made to

Wholly-Owned Public Sector Entities'.

Accumulated Funds

The category 'accumulated funds' includes all current and prior period retained funds.

Revaluation Surplus

Transfers arising from an administrative restructure involving not-for-profit entities and for-profit government entities are recognised at the amount at which the asset was recognised by the transferor

immediately prior to the restructure. Subject to below, in most instances this will approximate fair value.





af) Adjusted Budget Amounts

ag) Emerging Asset

ah) Changes in Accounting Policy, including New or Revised Australian Accounting Standards

(i)

1 July 2018

Notes $'000

Assets

Receivables 17 939

939

Accumulated funds (939)

a)

Accumulated funds Total change in equity

Notes $'000 $'000

Closing balance 30 June 2018 - AASB 139 728,291 728,291

17 939 939

729,230 729,230

729,230 729,230

Original New Difference

$'000 $'000 $'000

L&R Amortised cost 72,333 73,272 939

L&R Amortised cost 98,126 98,126 -

L&R Amortised cost - - -

FVPL FVPL - - -

Classification and measurement of financial instruments

On 1 July 2018 (the date of initial application of AASB 9), SLHD's management has assessed which business models apply to the financial assets by SLHD and has classified its

financial instruments into the apporopriate AASB 9 categories. The classification and measurement requirements of AASB 9 did not have a material impact to SLHD.

The impact of transition to AASB 9 on reserves and accumulated funds is, as follows:

Recognition of AASB 9 expected credit losses

Total impact

Opening balance 1 July 2018 - AASB 9

SLHD continued measuring at fair value, all financial assets previously held at fair value under AASB 139.

TCorpIM funds

SLHD applied AASB 9 retrospectively but has not restated the comparative information which is reported under AASB 139 Financial Instruments: Recognition and Measurement (AASB 139).

Any differences arising from the adoption of AASB 9 have been recognised directly in accumulated funds and other components of equity.

The effect of adopting AASB 9 on the Statement of Financial Position (increase / (decrease)) as at 1 July 2018 is set out below:

The following are the changes in the classification of SLHD’s financial assets:

- Trade receivables and other financial assets (i.e., term deposits) classified as ‘Loans and receivables’ (L&R) under AASB 139 as at 30 June 2018 are held to collect contractual cash

flows representing solely payments of principal and interest. At 1 July 2018, these are classified and measured as debt instruments at amortised cost.

Effective for the first time in 2018-19

The accounting policies applied in 2018-19 are consistent with those of the previous financial year except as a result of new or revised Australian Accounting Standards that have been

applied for the first time as follows:

SLHD's emerging interest in the Lifehouse Class A Assets, Radiation Oncology Building and Lifehouse Main Building has been valued in accordance with the Ministry of Health's policy for

Accounting for Privately Financed Projects. This policy required SLHD to initially determine the estimated written down replacement cost by reference to the project's historical cost escalated by a

construction index and the asset's estimated working life. The estimated written down replacement cost was then allocated on a systematic basis over the concession period of 40 years using the

annuity method and the Government Bond rate of 4.74% at commencement of the concession period on 13 November 2013 and finished on 12 November 2053.

Major variances between the original budgeted amounts and the actual amounts disclosed in the primary financial statements are explained in Note 36.

SLHD has adopted AASB 9 Financial Instruments (AASB 9), which resulted in changes in accounting policies in respect of recognition, classification and measurement of financial assets and

financial liabilities; derecognition of financial instruments; impairment of financial assets and hedge accounting. AASB 9 also significantly amends other standards dealing with financial

instruments such as the revised AASB 7 Financial Instruments: Disclosures (AASB 7R).

Carrying amount

AASB 139 measurement categoryAASB 139 AASB 9

NSW Health's budget is shown at a consolidated level when presented in parliament each year (i.e. in the NSW Government Budget Papers). SLHD's budget is not presented in parliament, therefore

AASB 1055 'Budgetary Reporting' is not applicable. Unlike the requirement in AASB 1055 ‘Budgetary Reporting’ to present original budget information, SLHD's financial statements present adjusted

budget information.The adjusted budgeted amounts are drawn from the initial Service Agreements between SLHD and the NSW Ministry of Health at the beginning of the financial year, as well as

any adjustments for the effects of additional supplementation provided in accordance with delegations to derive a final budget at year end (i.e. adjusted budget). The budget amounts are not subject

to audit and, accordingly, the relevant column entries in the financial statements are denoted as "Unaudited".

Total Adjustment on equity

Receivables

Term deposits

Other receivables

- Investments in TCorpIM Funds are managed on a fair value basis and hence were designated at fair value through profit or loss (FVPL) under AASB 139 as at 30 June 2018. Under

AASB 9, these are now mandatorily required at transition date of 1 July 2018 and going forward to be classified and measured as fair value through profit or loss.

- SLHD has not designated any financial liabilities at fair value through profit or loss. There are no changes in the classification and measurement for SLHD’s financial liabilities.

In summary, upon the adoption of AASB 9, SLHD had the following required or elected reclassifications as at 1 July 2018:

Measurement category





b) Impairment

Allowance for

impairment under

AASB 139 as

at 30 June 2018 Re-measurement

ECL under AASB 9 as

at 1 July 2018

$'000 $'000 $'000

(5,549) 939 (4,610)

(ii)

Overview of Assessment Activities

*

*

*

NSW public sector entities are not permitted to early adopt new Australian Accounting Standards, unless NSW Treasury determines otherwise. The following new Australian Accounting

Standards, excluding standards not considered applicable or material to SLHD have not been applied and are not yet effective. The possible impact of these Accounting Standards in the

period of initial application includes:

The project team has conducted various data gathering tasks with health entities around leases and certain revenue streams.

Issued but not yet effective

AASB 1058 'Income of Not-for-Profit Entities' applies to not-for-profit entities and is effective for annual periods beginning on or after 1 January 2019. This standard requires entities to

recognise income where the consideration to acquire an asset, including cash, is significantly less than the fair value principally to enable the entity to further its objectives. Under this standard,

the timing of income recognition may be impacted depending on whether there is a liability or other performance obligation associated with the acquired asset, including cash. AASB 1058

'Income of Not-for-Profit Entities' also requires government agencies to recognise income for volunteer services received if the fair value of those services can be measured reliably and the

services would have been purchased if they had not been donated. This is consistent with current practice under AASB 1004 'Contributions' and is not expected to materially impact these

financial statements.

AASB 1059 'Service Concession Arrangements' is applicable to public sector entities only and is effective for annual periods beginning on or after 1 January 2020. This standard requires the

grantor to recognise a service concession asset in a service concession arrangement where it controls the asset. A corresponding financial liability and/or grant of right liability is also

recognised depending on the nature of the consideration exchanged. Service concession assets (including those provided by the operator, an upgrade to or a major component replacement

of an existing asset of the grantor; and existing assets of the grantor – also applicable to previously unrecognised intangible assets except goodwill) are initially measured at current

replacement cost based on AASB 13 'Fair Value Measurement' principles. They are subsequently accounted for under AASB 116 'Property, Plant & Equipment' or AASB 138 'Intangible

Assets'. Service concession liabilities are initially measured at the same amount as the service concession asset and subsequently measured using either the “financial liability” model applying

AASB 9 'Financial Instruments' or the “grant of right” model under AASB 1059 'Service Concession Arrangements'. AASB 1059 'Service Concession Arrangements' requires retrospective

application.

The Ministry of Health has formed a project team to lead the implementation of the new accounting standards. The objective of the project is to continuously analyse and assess the impact of

the new accounting standards. This includes changes to SLHD's accounting policies, internal and external reporting requirements, IT systems, business processes and associated internal

controls with the objectives of quantifying the expected first time adoption impacts as well as supporting ongoing compliance with the new accounting requirements.

The adoption of AASB 9 has changed SLHD's accounting for impairment losses for financial assets by replacing AASB 139's incurred loss approach with a forward-looking expected

credit loss (ECL) approach. AASB 9 requires SLHD to recognise an allowance for ECLs for all debt instruments not held at fair value through profit and loss.

Set out below is the reconciliation of the closing impairment allowances under AASB 139 to the opening loss allowances determined under AASB 9:

Loans and receivables under AASB 139 / Financial assets at amortised cost under AASB 9

The standard permits two methods of adoption: full retrospective – by retrospectively adjusting each prior reporting period presented and recognising the cumulative effect of initially applying

the new requirements at the start of the earliest period, which would be 1 July 2018; or modified retrospective – by recognising the cumulative effect of initially applying the new requirements at

the initial application, which would be 1 July 2019. NSW Treasury has mandated a modified retrospective application of this accounting standard.

AASB 15 'Revenue from Contracts with Customers' (and associated amending standards AASB 2014-5, AASB 2015-8, AASB 2016-3, AASB 2016-7 and AASB 2016-8) applies to annual

periods beginning on or after 1 January 2019 for not-for-profit entities. AASB 15 'Revenue from Contracts with Customers' establishes a contract-based five-step analysis of transactions to

determine the nature, amount and timing of revenue arising from contracts with customers. This new standard requires revenue to be recognised when control of the goods or services are

transferred to the customer at the transaction price. This may impact the timing of recognising certain revenue currently recognised by reference to the stage of completion of the transaction.

AASB 16 'Leases' replaces all existing lease requirements and applies to annual periods beginning on or after 1 January 2019. For lessees, the distinction between operating and finance

leases will no longer exist. Instead, AASB 16 'Leases' will require lessees to account for practically all leases under a single on-balance sheet model in a similar way to finance leases under

AASB 117 'Leases'. The standard includes two recognition exemptions for lessees – leases of ‘low value’ assets (e.g. personal computers below $10,000) and short term leases (i.e. leases

with a lease term of 12 months or less). At the commencement of a lease, a lessee will recognise a liability representing its obligation to make future lease payments and an asset representing

its right of use to the underlying asset for the lease term. Lessees will be required to separately recognise interest expense on the lease liability and depreciation expense on the right of use

asset rather than operating lease expense.

The new standard will gross up the Statement of Financial Position and change Statement of Comprehensive Income and cash flow presentation. Rent and lease expense will be replaced by

depreciation and interest expense in Statement of Comprehensive Income. This results in a front-loaded lease expense, decreasing the net result and equity position. The Statement of Cash

Flows for lessees will also be affected as payments for the principal portion of the lease liability will be presented within financing activities.

Lessor accounting is substantially unchanged from today’s accounting under AASB 117 Leases. Lessors will continue to classify all leases using the same classification as in AASB 117

Leases and distinguish between two types of leases: operating and finance leases.

Work currently underway includes:

implementation of an IT solution for lease management and accounting

comprehensive review and capture of lease information

review of accounting policies and processes surrounding leases and revenue.





*

*

*

*

*

*

*

*

*

SLHD has compiled a lease register and calculated the likely impact of the new leasing standards, to be as follows.

Operating lease expense recognised under AASB 117 Leases will decrease by approximately $3.210 million in the 2019-2020 financial year.

SLHD in consultation with the NSW Ministry of Health has performed a preliminary impact assessment by the major revenue lines. The review has not indicated any material impact arising

from the adoption of the new revenue accounting standard. The likely impacts are:

The work on Service Concession Arrangements is in progress. SLHD expects the following impacts from the preliminary work performed so far:

Leases

Depreciation expense will be booked on right of use assets, which will be on a straight line basis. For 2019-2020 financial year, depreciation expense is expected to be higher by

approximately $3.163M.

Revenue and Income of Not-for-Profit Entities

SLHD plans to adopt the new standards on the required effective date in line with the NSW Treasury’s instructions. The required application dates are already noted in the respective

accounting standards paragraphs, such as AASB 15, 16 and 1058 is effective for financial years beginning 1 January 2019 and 1 January 2020 for AASB 1059.

Service Concession Arrangements

Application Date

The total assets and liabilities on the Statement of Financial Position will increase by approximately $9.016M on the date of transition (on 1 July 2019). In subsequent years, total equity

is expected to decrease due to a reduction in capitalised assets being on a straight line basis whilst the liability reduces the principal amount of repayments.

Interest expenses will increase by approximately $0.187M in the 2019-2020 financial year due to the unwinding of the effective interest rate implicit in the leases. Interest expense will

be greater earlier in a lease life due to the higher principal value causing profit variability over the course of the leases life. This effect may be partially mitigated due to the number of

leases held by SLHD at different stages of their lease terms.

The assessment outcomes are based on certain assumptions and are indicative only. There are likely to be variances with the actual impacts to be reported in 2019-2020 financial year

and onwards.

Deferral of 'Grants and Other Contributions' revenue. The impacts are not expected to be material as most funds received correlates to the level of activities performed during the year

and most contracts are short to medium term only. Some timing differences is expected between inflow of funds and the level of activity, which may require some deferral or accrual of

grant and other contribution revenue.

Specific quantitative and qualitative disclosures may be required under AASB 15 Revenue from Contracts with Customers.

No significant impact expected on SLHD.

Operating cash flows will be higher as repayment of the principal portion of all lease liabilities will be classified as financing activities.

Potential Impact on SLHD's Financial Report

While the consolidated entity, controlled by the ultimate parent, is yet to complete full implementation and adoption of the new accounting standards, the following summaries work undertaken

by SLHD so far and the known and expected impacts:

PARENT CONSOLIDATION

2019 2018 2019 2018

$000 $000 $000 $000

2. Employee Related Expenses

----- ----- Salaries and Wages (including annual leave and ADO) 995,784 956,775

----- ----- Superannuation - Defined Benefit Plans 7,946 8,594

----- ----- Superannuation - Defined Contribution Plans 88,412 83,946

----- ----- Long Service Leave 77,905 44,857

----- ----- Redundancies 200 -----

----- ----- Workers' Compensation Insurance 10,273 8,241

----- ----- Fringe Benefits Tax 61 157

----- ----- 1,180,581 1,102,570

The amounts below are capitalised and do not form part of the above total employee related

costs:

----- ----- Employee Related Expenses Capitalised - Land and Buildings ----- 177

----- ----- ----- 177

3. Personnel Services

992,277 953,435 Salaries and Wages (including Annual Leave and ADO) ----- -----

88,080 83,652 Superannuation - Defined Contribution Plans ----- -----

5,674 4,809 Long Service Leave ----- -----

200 ----- Redundancies ----- -----

10,273 8,241 Workers' Compensation Insurance ----- -----

61 157 Fringe Benefits Tax ----- -----

1,096,565 1,050,294 ----- -----

Personnel services of Sydney Local Health District was provided by its controlled entity,

Sydney Local Health District Special Purpose Service Entity.

The amounts below are capitalised and do not form part of the above total personnel services:

----- 177 Personnel Services Expenses Capitalised - Land and Buildings ----- -----





2019 2018 2019 2018

$000 $000 $000 $000




4. Other Expenses

162 111 Advertising 163 113

252 246 Auditor's Remuneration - Audit of Financial Statements 280 273

20,594 22,586 Blood and Blood Products 20,594 22,586

160 1,213 Consultancies 160 1,213

4,808 5,848 Contractors 4,848 6,123

18,093 17,792 Domestic Supplies and Services 18,100 17,805

76,533 69,097 Drug Supplies 76,576 69,136

27,016 25,700 Food Supplies 27,034 25,719

17,624 14,830 Fuel, Light and Power 17,624 14,831

11,554 7,990 Patient Transport Costs 11,554 7,990

26,653 23,933 Information Management Expenses 26,686 23,945

1,853 1,741 Insurance 1,887 1,773

38,278 37,022 Maintenance (See Note 4(b)) 38,491 36,729

101,500 101,209 Medical and Surgical Supplies 101,520 101,236

1,883 1,958 Motor Vehicle Expenses 1,886 1,963

2,800 2,614 Postal and Telephone Costs 2,807 2,619

3,600 3,775 Printing and Stationery 3,622 3,810

2,156 2,112 Rates and Charges 2,168 2,116

4,535 3,562 Rental 4,535 3,562

744 153 Hosted Services Purchased from entities controlled by the Immediate Parent 744 153

69,283 69,182 Specialised Services (Pathology, Dental, Radiology, Dialysis, research and other departments ) 70,336 70,641

15,800 16,357 Staff Related Costs 16,147 17,095

5,228 5,176 Travel Related Costs 5,349 5,322

83,246 70,144 Other (See Note 4(a)) 83,459 70,430

534,355 504,351 536,570 507,183


2019 2018 2019 2018

$000 $000 $000 $000

4. Other Expenses

a) Other Includes:

776 2,243 Aircraft Expenses (Ambulance) 776 2,243

48,209 47,162 Contract for Patient Services 48,209 47,162

10,163 10,931 Corporate Support Services 10,163 10,931

908 908 Courier and Freight 963 967

15 12 Isolated Patient Travel and Accommodation Assistance Scheme 15 12

4,306 3,201 Legal Services 4,318 3,247

616 551 Membership/Professional Fees 626 567

1,730 1,899 Motor Vehicle Operating Lease Expense - Minimum Lease Payments 1,735 1,903

1,666 2,061 Other Operating Lease Expense - Minimum Lease Payments 1,666 2,061

116 145 Quality Assurance/Accreditation 116 145

1,321 686 Security Services 1,321 686

13,420 345 Other Miscellaneous 13,551 506

83,246 70,144 83,459 70,430





2019 2018 2019 2018

$000 $000 $000 $000

4. Other Expenses




b) Reconciliation of Total Maintenance

17,960 17,344 Maintenance Contracts 18,091 17,515

6,436 6,900 New/Replacement Equipment under $10,000 6,491 6,408

13,912 12,840 Repairs Maintenance/Non Contract 13,939 12,868

(30) (62) Other (30) (62)

38,278 37,022 38,491 36,729

7,444 7,463 7,444 7,463

45,722 44,485 Total Maintenance Expenses 45,935 44,192

'Auditor's Remuneration' was paid to The Audit Office of New South Wales, an Entity

Controlled by the Ultimate Parent.

The majority of 'Patient Transport Costs' were paid to Health Administration Corporation, an

Entity Controlled by the Immediate Parent.

The majority of 'Information Management Expenses' were paid to Health Administration

Corporation, an Entity Controlled by the Immediate Parent.

The majority of 'Domestic Supplies and Services', 'Food Supplies', 'Corporate Support

Services', were paid to Health Administration Corporation, an Entity Controlled by the

Immediate Parent.

The majority of 'Specialised Services' expenses were paid to the Health Administration

Corporation, an Entity Controlled by the Immediate Parent.

Some 'Rental' and 'Staff Related costs' expenses were paid to Entities Controlled by the

Immediate Parent.

Some 'Legal expenses' were paid to the Crown Solicitors Office, an Entity Controlled by the

Ultimate Parent.

Some 'Other Miscellaneous' were paid to Entities controlled by the Immediate Parent.

Maintenance Expense - Contracted Labour and Other (Non-Employee Related in Note 4)

Employee Related/Personnel Services Maintenance Expense included in Notes 2 and 3


2019 2018 2019 2018

$000 $000 $000 $000




5. Depreciation and Amortisation

41,507 39,111 Depreciation - Buildings 41,936 39,573

14,220 14,908 Depreciation - Plant and Equipment 14,656 15,364

197 12 Depreciation - Infrastructure Systems 197 12

108 219 Amortisation - Leasehold Improvements 108 219

263 225 Amortisation - Intangible Assets 263 225

56,295 54,475 57,160 55,393

6. Grants and Subsidies

18,741 18,498 Non-Government Organisations 18,741 18,498

1,499 556 Grants to Research Organisations 1,499 556

161 11,915 Grants Paid to Entities Controlled by the Immediate Parent 161 11,915

1,139 750 Other Grants 1,318 958

21,540 31,719 21,719 31,927

7. Finance Costs

200 229 Interest on Loans 200 229

200 229 200 229

8. Payments to Affiliated Health Organisations

(a) Recurrent Sourced

12,101 11,806 Tresillian Family Care Centres at Belmore, Willoughby, and Wollstonecraft 12,101 11,806

640 625 Central Sydney Scarba Service 640 625

12,741 12,431 12,741 12,431


2019 2018 2019 2018

$000 $000 $000 $000

9. Sale of Goods and Services

a) Sale of Goods comprise the following:-

1,756 1,583 Pharmacy Sales 1,756 1,583

10,425 10,064 Sale of Prosthesis 10,425 10,064

30 21 Other 30 21

12,211 11,668 12,211 11,668

b) Rendering of Services comprise the following:-

Patient Fees

90,561 87,178 - Inpatient Fees 90,561 87,178

521 223 - Nursing Home Fees 521 223

4,596 4,417 - Non Inpatient Fees 4,596 4,417

9,668 9,780 Department of Veterans' Affairs 9,668 9,780

675 697 Staff-Meals and Accommodation 675 697

17,904 18,704 Infrastructure Fees - Monthly Facility Charge 17,904 18,704

10,153 9,791 Infrastructure Fees - Annual Charge 10,153 9,791

1,960 2,715 Cafeteria/Kiosk 1,960 2,715

5,075 4,006 Car Parking 5,075 4,006

1,069 1,047 Child Care Fees 1,069 1,047

108 22 Clinical Services (excluding Clinical Drug Trials) 108 22

73 97 Commercial Activities 73 97

4 16 Enteral Nutrition 4 16

112 115 Fees for Medical Records 112 115

53 58 Information Retrieval 53 58

42,405 34,271 Highly Specialised Drugs 42,405 34,271

5,011 7,295 Motor Accident Authority Third Party 5,011 7,295

110 147 Private Use of Motor Vehicles 110 147

6,956 7,668 Hosted Services Provided to Entities Controlled by Immediate Parent 6,956 7,668

4,849 4,048 Services Provided to Non NSW Health Organisations 4,849 4,048

5,125 3,915 Other 5,125 3,915

206,988 196,210 206,988 196,210

219,199 207,878 219,199 207,878

The majority of 'Commercial Activities' revenue was earned from entities controlled by the

Immediate Parent.

The majority of 'Motor Accident Authority Third Party ' revenue was received from State

Insurance Regulatory Authority (SIRA) an Entity Controlled by the Ultimate Parent.

10. Investment Revenue

4,444 4,177 Interest 5,069 4,761

52 50 Other 52 50

52 50 - Royalty Income 52 50

4,496 4,227 5,121 4,811





2019 2018 2019 2018

$000 $000 $000 $000

11. Grants and Other Contributions

6,211 6,827 Clinical Drug Trials 6,211 6,827

11,993 11,786 Commonwealth Government Grants 11,993 11,786

7,958 5,258 Industry Contributions/Donations 8,726 6,340

4,781 4,606 Cancer Institute Grants Received from an Entity Controlled by the Immediate Parent 4,781 4,606

1,699 2,222 1,699 2,222

2,320 3,625 2,320 3,625

3,550 2,780 Research Grants 7,242 7,473

6,116 4,766 Other Grants 6,116 4,766

44,628 41,870 49,088 47,645

The majority of 'Grants & Contributions Received from Entities Controlled by the Ultimate

Parent' were received from the Health Administration Corporation and the NSW Department of

Education.

The majority of 'Grants & Contributions Received from Entities Controlled by the Immediate

Parent' were received from Northern Sydney LHD, Health Education and Training Institute and

The Sydney Children's Hospital Network, Agency for Clinical Innovation and South Eastern

Sydney LHD.

12. Acceptance by the Crown Entity of Employee Benefits

----- ----- Superannuation - Defined Benefit Plans 7,946 8,594

----- ----- Long Service Leave Provision 72,231 40,047

----- ----- 80,177 48,641

The following liabilities and expenses have been assumed by the Crown Entity:

Grants & Contributions received from entities controlled by the Immediate Parent

Grants & Contributions received from entities controlled by the Ultimate Parent





2019 2018 2019 2018

$000 $000 $000 $000




13. Other Income

Other Revenue comprises the following:-

123 188 Commissions 123 188

1,815 1,407 Conference and Training Fees 1,815 1,407

201 ----- Discounts 201 -----

995 1,315 Insurance Refunds 995 1,315

4,866 4,606 Lease and Rental * 4,866 4,606

106 102 Sale of Merchandise, Old Wares and Books 106 102

248 301 Sponsorship 248 301

3,124 3,599 Treasury Managed Fund Hindsight Adjustment 3,124 3,599

14,832 11,071 Other ** 16,048 12,974

26,310 22,589 27,526 24,492

*Some 'Lease and Rental' revenue was received from Entities Controlled by the Immediate Parent.

**Some 'Other' income was received from Entities Controlled by the Immediate Parent.

14. Gains / (Losses) on Disposal

22,139 9,661 Property, Plant and Equipment 22,377 9,753

(19,358) (9,282) Less: Accumulated Depreciation (19,583) (9,351)

2,781 379 Written Down Value 2,794 402

37 154 Less: Proceeds from Disposal 37 154

(2,744) (225) Gain / (Loss) on Disposal of Property, Plant and Equipment (2,757) (248)

(2,744) (225) Total Gain / (Loss) on Disposal (2,757) (248)

15. Other Gains / (Losses)

----- (7,296) Impairment of Receivables ----- (7,296)

----- (7,296) ----- (7,296)

PARENT

2019 2018 2019 2018

$000 $000 $000 $000

16. Cash and Cash Equivalents

63,797 68,803 Cash at Bank and On Hand 67,159 72,030

31,464 28,017 Short Term Deposits 31,464 28,017

95,261 96,820 98,623 100,047

For the purposes of the Statement of Cash Flows, 'Cash and Cash Equivalents' includes Cash

at Bank, Cash on Hand, Short Term Deposits with original maturities of three months or less,

which are subject to an insignificant risk of changes in value, and net of outstanding bank

overdraft.

Cash & Cash Equivalent assets recognised in the Statement of Financial Position are

reconciled at the end of the financial year to the Statement of Cash Flows as follows:

95,261 96,820 Cash and Cash Equivalents (per Statement of Financial Position) 98,623 100,047

95,261 96,820 Closing Cash and Cash Equivalents (per Statement of Cash Flows) 98,623 100,047

Refer to Note 38 for details regarding credit risk, liquidity risk and market risk arising from

financial instruments.

CONSOLIDATION





2019 2018 2019 2018

$000 $000 $000 $000

17. Receivables

Current

47,623 38,035 Sale of Goods and Services 47,974 38,467

6,763 6,279 Intra Health Receivables 6,763 6,279

3,633 3,272 Goods and Services Tax 3,526 3,255

26,451 26,057 Other Debtors 26,509 26,113

84,470 73,643 Sub Total 84,772 74,114

(5,264) ----- Less: Allowance for Expected Credit Losses* (5,264) -----

----- (5,549) Less: Allowance for Impairment** ----- (5,549)

79,206 68,094 Sub Total 79,508 68,565

2,894 3,480 Prepayments 3,009 3,768

82,100 71,574 82,517 72,333

'Intra Health Receivables' include amounts receivable from Entities Controlled by the

Immediate Parent. The majority of the balance at reporting date was receivable from Health

Infrastructure and South Western Sydney LHD.

a) Movement in the Allowance for Expected Credit Losses*

Sale of Goods and Services

(5,312) ----- Balance as at 30 June 2018 under AASB 139 (5,312) -----

971 ----- Amounts restated through opening Accumulated Funds 971 -----

(4,341) ----- Balance at 1 July 2018 under AASB 9 (4,341) -----

4,206 ----- Amounts Written Off During the Year 4,206 -----

(5,105) ----- (Increase) / Decrease in Allowance Recognised in the Net Result (5,105) -----

(5,240) ----- Balance at 30 June 2019 (5,240) -----

Other Debtors

(237) ----- Balance as at 30 June 2018 under AASB 139 (237) -----

(32) ----- Amounts restated through opening Accumulated Funds (32) -----

(269) ----- Balance at 1 July 2018 under AASB 9 (269) -----

31 ----- Amounts Written Off During the Year 31 -----

214 ----- (Increase) / Decrease in Allowance Recognised in the Net Result 214 -----

(24) ----- Balance at 30 June 2019 (24) -----

(5,264) ----- (5,264) -----

b) Movement in the Allowance for Impairment**

Sale of Goods and Services

----- (3,189) Balance at 1 July 2017 ----- (3,189)

----- 4,823 Amounts Written Off During the Year ----- 4,823

----- (6,947) (Increase) / Decrease in Allowance Recognised in the Net Result ----- (6,947)

----- (5,313) Balance at 30 June 2018 ----- (5,313)

Other Debtors

----- (627) Balance at 1 July 2017 ----- (627)

----- 741 Amounts Written Off During the Year ----- 741

----- (350) (Increase) / Decrease in Allowance Recognised in the Net Result ----- (350)

----- (236) Balance at 30 June 2018 ----- (236)

----- (5,549) ----- (5,549)





2019 2018 2019 2018

$000 $000 $000 $000

17. Receivables




c) The current and non-current sale of goods and services balances above include the

following patient fee receivables:

Current and Non-Current include:

5,204 4,368 Patient Fees - Compensable 5,204 4,368

17,464 11,230 Patient Fees - Ineligible 17,464 11,230

12,041 11,800 Patient Fees - Inpatient & Other 12,041 11,800

34,709 27,398 34,709 27,398

Details regarding credit risk, liquidity risk and market risk, including financial assets that are

either past due or impaired are disclosed in Note 38.


2019 2018 2019 2018

$000 $000 $000 $000

18. Inventories

4,943 5,247 Drugs Supplies 4,943 5,247

8,259 6,266 Medical and Surgical Supplies 8,259 6,266

13,202 11,513 13,202 11,513

19. Other Financial Assets

Current

77,447 77,209 Term Deposits 99,431 98,126

77,447 77,209 99,431 98,126





2019 2018 2019 2018

$000 $000 $000 $000

20. Property, Plant and Equipment

Land and Buildings - Fair Value

2,267,732 2,020,872 Gross Carrying Amount 2,283,632 2,034,422

608,105 917,910 Less: Accumulated Depreciation and Impairment 610,627 924,265

1,659,627 1,102,962 Net Carrying Amount 1,673,005 1,110,157

Plant and Equipment - Fair Value*

222,941 219,712 Gross Carrying Amount 230,024 226,353

132,650 128,153 Less: Accumulated Depreciation and Impairment 136,325 131,751

90,291 91,559 Net Carrying Amount 93,699 94,602

Infrastructure Systems - Fair Value

15,567 500 Gross Carrying Amount 15,567 500

5,794 82 Less: Accumulated Depreciation and Impairment 5,794 82

9,773 418 Net Carrying Amount 9,773 418

Leasehold Improvements - Fair Value*

2,414 1,155 Gross Carrying Amount 2,414 1,155

868 760 Less: Accumulated Depreciation and Impairment 868 760


1,761,237 1,195,334 Total Property, Plant and Equipment at Net Carrying Amount 1,778,023 1,205,572

* For non-specialised assets with short useful lives, recognition at depreciated historical cost is

regarded as an acceptable approximation of fair value, in accordance with Treasury Policy

Paper 14-01.




PARENT

20. Property, Plant and Equipment - Reconciliation

Land and

Buildings

Plant and

Equipment

Infrastructure

Systems

Leasehold

Improvements Total

$000 $000 $000 $000 $000

2019

Net Carrying Amount at Beginning of Year 1,102,962 91,559 418 395 1,195,334

Additions 62,789 21,722 285 1,259 86,055

Disposals (2,289) (493) ----- ----- (2,782)

Equity Transfers - Transfers In / (Out) (9,652) ----- ----- ----- (9,652)

Transfers within NSW Health Entities through Statement of Comprehensive Income ----- 458 ----- ----- 458

Net Revaluation Increment Less Revaluation Decrements 542,402 ----- 5,453 ----- 547,855

Depreciation Expense (41,507) (14,220) (197) (108) (56,032)

Reclassifications 4,922 (8,736) 3,814 ----- -----

Net Carrying Amount at End of Year 1,659,627 90,290 9,773 1,546 1,761,236

Land and

Buildings

Plant and

Equipment

Infrastructure

Systems

Leasehold

Improvements Total

$000 $000 $000 $000 $000

2018


Additions 38,257 14,704 ----- 465 53,426

Disposals ----- (379) ----- ----- (379)

Transfers within NSW Health Entities through Statement of Comprehensive Income ----- (11,104) ----- ----- (11,104)


Reclassifications (6,910) 6,910 ----- ----- -----

Net Carrying Amount at End of Year 1,102,962 91,559 418 395 1,195,334

(ii) For land, buildings and infrastructure systems and Other Assets SLHD obtains external valuations by independent valuers every three years. The last revaluation was performed by APV Valuers &

Asset Management (APV) for the 2018/19 financial year. APV is an independent entity and is not an employee of the SLHD.

Further details regarding the fair value measurement of property, plant and equipment are disclosed in Note 23.

(i) Land and Buildings include land owned by the Health Administration Corporation but controlled by SLHD [see Note 1(l)].




A reconciliation of the carrying amount for each class of property, plant and equipment is set out below:

CONSOLIDATION

20. Property, Plant and Equipment - Reconciliation (Continued)

Land and

Buildings

Plant and

Equipment

Infrastructure

Systems

Leasehold

Improvements Total

$000 $000 $000 $000 $000

2019


Additions 62,789 22,589 285 1,259 86,922

Disposals (2,289) (505) ----- ----- (2,794)

Equity Transfers - Transfers In / (Out) (9,652) ----- ----- ----- (9,652)

Transfers within NSW Health Entities through Statement of Comprehensive Income ----- 458 ----- ----- 458

Net Revaluation Increment Less Revaluation Decrements 548,961 ----- 5,453 ----- 554,414


Reclassifications 4,975 (8,789) 3,814 ----- -----

Net Carrying Amount at End of Year 1,673,005 93,699 9,773 1,546 1,778,023

Land and

Buildings

Plant and

Equipment

Infrastructure

Systems

Leasehold

Improvements Total

$000 $000 $000 $000 $000

2018


Additions 38,257 15,742 ----- 465 54,464

Disposals ----- (402) ----- ----- (402)

Transfers within NSW Health Entities through Statement of Comprehensive Income ----- (11,104) ----- ----- (11,104)


Reclassifications (6,910) 6,910 ----- ----- -----

Net Carrying Amount at End of Year 1,110,157 94,602 418 395 1,205,572

Further details regarding the fair value measurement of property, plant and equipment are disclosed in Note 23.

(ii) For land, buildings and infrastructure systems and Other Assets SLHD obtains external valuations by independent valuers every three years. The last revaluation was performed by APV Valuers &

Asset Management (APV) for the 2018/19 financial year. APV is an independent entity and is not an employee of the SLHD.

(i) Land and Buildings include land owned by the Health Administration Corporation but controlled by SLHD [see Note 1(l)].

A reconciliation of the carrying amount for each class of property, plant and equipment is set out below:





2019 2018 2019 2018

$000 $000 $000 $000

21. Intangible Assets

Intangibles

4,611 1,411 Cost (Gross Carrying Amount) 4,611 1,411

783 520 Less Accumulated Amortisation and Impairment 783 520


3,828 891 Total Intangible Assets at Net Carrying Amount 3,828 891

21. Intangibles Assets - Reconciliation

891

3,200

(263)

3,828

553

563

(225)

891 Net Carrying Amount at End of Year

Amortisation (Recognised in Depreciation and Amortisation)

Total

$000

Additions (Separately identify Internal Development or Acquired Separately)

2019

Total

$000

PARENT AND CONSOLIDATION

2018

Net Carrying Amount at Beginning of Year

Net Carrying Amount at End of Year




Amortisation (Recognised in Depreciation and Amortisation)

Net Carrying Amount at Beginning of Year

Additions (Separately identify Internal Development or Acquired Separately)


2019 2018 2019 2018

$000 $000 $000 $000

22. Other Non-Current Assets

8,918 4,653 Emerging Rights to Assets (refer Note 1(ag)) 8,918 4,653

8,918 4,653 8,918 4,653

Amounts Recognised in Other Comprehensive Income Relating to Emerging Rights to

Assets

Emerging Rights to Assets - Asset Revaluation

2,494 ----- 2,494 -----

2,494 ----- 2,494 -----





23. Fair Value Measurement of Non-Financial Assets

a) Fair Value Hierarchy

Level 1 Level 2 Level 3 Total Fair Value

2019 $000 $000 $000 $000

PARENT

Property, Plant and Equipment (Note 20)

- Land and Buildings ----- 21,702 1,560,513 1,582,215

- Infrastructure Systems ----- ----- 9,488 9,488

Other Assets (Note 22) Emerging Assets ----- ----- 8,918 8,918

----- 21,702 1,578,919 1,600,621

CONSOLIDATION



- Infrastructure Systems ----- ----- 9,488 9,488


----- 21,702 1,592,297 1,613,999

There were no transfers between level 1 and 2 during the year ended 30 June 2019.

Level 1 Level 2 Level 3 Total Fair Value

2018 $000 $000 $000 $000

PARENT



- Infrastructure Systems ----- ----- 418 418


----- 9,500 1,027,408 1,036,908

CONSOLIDATION



- Infrastructure Systems ----- ----- 418 418


----- 9,500 1,034,603 1,044,103

There were no transfers between level 1 and 2 during the year ended 30 June 2018.




Fair value measurements recognised in the Statement of Financial Position are categorised into the following levels.

The above figures exclude Work in Progress and newly completed projects which are carried at cost, and as a result they will not agree to Note 20.

The above figures exclude Work in Progress and newly completed projects which are carried at cost, and as a result they will not agree to Note 20.






b) Valuation Techniques, Inputs and Processes

All commercial and non-restricted land is included in Level 2 as these land valuations have a high level of observable inputs although these lands are not identical.

At the end of each reporting period a fair value assessment is made on any movements since the last revaluation and a determination as to whether any adjustments need to be made. These

adjustments are made by way of application of indices (refer Note 20 reconcilation.)

For land, buildings and infrastructure systems and other assets SLHD obtains external valuations by independent valuers every three years. The last revaluation was performed by APV for the

2018/19 financial year. APV is an independent entity and is not an associated entity of SLHD.

Non-Current Assets Held for Sale is a non-recurring item that is measured at fair value less cost to sell, which is less than its carrying amount. These assets are categorised as level 2.

For buildings and infrastructure and other assets, many assets are of a specialised nature or use, and thus the most appropriate valuation method is depreciated replacement cost. These assets

are included as Level 3 as these assets have a high level of unobservable inputs. However, residential properties are valued on a market approach and included in Level 2.

For land, the valuation by the valuer is made on a market approach, comparing similar assets (not identical) and observable inputs. The most significant input is price per square metre.

The non-current assets categorised in a) above have been measured as either Level 2 or Level 3 based on the following valuation techniques and inputs:

The majority of the restricted land has been classified as Level 3, although observable inputs have been used, a significant level of professional judgement is required to adjust inputs in

determining the land valuations. Certain parcels of land have zoning restrictions, for example hospital grounds and values are adjusted accordingly.



c) Reconciliation of Recurring Level 3 Fair Value Measurements

Land and Buildings

Infrastructure

Systems Other Assets

Total Level 3

Recurring

2019 $000 $000 $000 $000

PARENT

Fair value as at 1 July 2018 1,022,337 418 4,653 1,027,408

Additions 59,635 ----- 1,771 61,406

Revaluation Increments / (Decrements) recognised in Other Comprehensive Income – included

in line item 'Changes in Revaluation Surplus of Property, Plant and Equipment’ (Note 20) 537,858 5,453 ----- 543,311


in line item 'Changes in Revaluation Surplus of Other Assets’ (Note 22)

----- ----- 2,494 2,494

Transfers to Level 2 (7,200) ----- ----- (7,200)

Disposals (2,289) ----- ----- (2,289)

Depreciation expense (40,644) (197) ----- (40,841)

Equity Transfers - Transfers In / (Out) (9,652) ----- ----- (9,652)

Reclassify between Buildings, Plant & Equipment and Infrastructure 468 3,814 ----- 4,282

Fair Value as at 30 June 2019 1,560,513 9,488 8,918 1,578,919

CONSOLIDATION


Additions 59,635 ----- 1,771 61,406


in line item 'Changes in Revaluation Surplus of Property, Plant and Equipment’ (Note 20) 544,417 5,453 ----- 549,870


in line item 'Changes in Revaluation Surplus of Other Assets’ (Note 22)

----- ----- 2,494 2,494

Transfers to Level 2 (7,200) ----- ----- (7,200)

Disposals (2,289) ----- ----- (2,289)


Equity Transfers - Transfers In / (Out) (9,652) ----- ----- (9,652)

Reclassify between Buildings, Plant & Equipment and Infrastructure 521 3,814 ----- 4,335

Fair Value as at 30 June 2019 1,573,891 9,488 8,918 1,592,297




There were no transfers between Level 1 or 2 during the year ended 30 June 2019.






Land and Buildings

Infrastructure

Systems Other Assets

Total Level 3

Recurring

2018 $000 $000 $000 $000

PARENT


Additions ----- ----- 1,101 1,101


Fair Value as at 30 June 2018 1,022,337 418 4,653 1,027,408

CONSOLIDATION


Additions ----- ----- 1,101 1,101


Fair Value as at 30 June 2018 1,029,532 418 4,653 1,034,603

There were no transfers between Level 1 or 2 during the year ended 30 June 2018.

24. Restricted Assets

PARENT Opening Equity Expense Revenue Closing Equity

1 July 2018 2019 2019 30 June 2019

Category $000 $000 $000 $000

Community Welfare 1,372 475 721 1,618

Facility Improvements 52,036 18,560 17,676 51,152

Holds Funds in Perpetuity 533 ----- ----- 533

Patient Welfare 2,484 783 619 2,320

Private Practice Disbursements (No.2 Accounts) 53,446 11,801 10,332 51,977

Public Contributions 2,334 195 847 2,986

Research 40,985 13,805 16,327 43,507

Staff Welfare 238 119 23 142

Training and Education including Conferences 14,292 1,231 879 13,940

167,720 46,969 47,424 168,175

CONSOLIDATION Opening Equity Expense Revenue Closing Equity

1 July 2018 2019 2019 30 June 2019

Category $000 $000 $000 $000

Community Welfare 1,372 475 721 1,618

Facility Improvements 78,204 20,805 26,422 83,821

Holds Funds in Perpetuity 533 ----- ----- 533

Patient Welfare 2,484 783 619 2,320

Private Practice Disbursements (No.2 Accounts) 53,446 11,801 10,332 51,977

Public Contributions 2,334 195 847 2,986

Research 48,419 18,641 20,410 50,188

Staff Welfare 238 119 23 142

Training and Education including Conferences 14,292 1,232 879 13,939

201,322 54,051 60,253 207,524

Restricted assets are held for the following purpose and cannot be used for any other purpose.

Category Purpose

Community Welfare

Facility Improvements

Holds Funds in Perpetuity

Patient Welfare

Private Practice Disbursements (No.2 Accounts)

Public Contributions

Research

Staff Welfare

Training and Education including Conferences

Improvements to service access, health literacy, public and preventative health care.

Repairs, maintenance, renovations and/or new equipment or building related expenditure.

Donor has explicitly requested funds be invested permanently and not otherwise expended.

SLHD's financial statements include the following assets which are restricted for stipulated purposes and/or by externally imposed conditions, e.g. donor requirements. The assets are only

available for application in accordance with the terms of the donor restrictions. They consist of cash assets and rights and obligations to receive and make payments as at 30 June 2019.




Research to gain knowledge, understanding and insight.

Staff benefits such as staff recognition awards, functions and staff amenity improvements.

Professional training, education and conferences.

Improvements such as medical needs, financial needs and standards for patients’ privacy and dignity.

Staff specialists’ private practice arrangements to improve the level of clinical services provided.

Donations or legacies received without any donor-specified conditions as to its use.


2019 2018 2019 2018

$000 $000 $000 $000

25. Payables

Current

----- ----- Accrued Salaries, Wages and On-Costs 27,207 23,379

----- ----- Taxation and Payroll Deductions 7,257 6,649

34,347 29,914 Accrued Liability - Purchase of Personnel Services ----- -----

36,000 30,200 Creditors 36,000 30,192

Other Creditors

13,832 19,187 - Payables to Entities Controlled by the Immediate Parent 13,832 19,187

8,407 4,684 - Other 8,569 4,940

92,586 83,985 92,865 84,347

'Creditors' include some amounts owing to Entities Controlled by the Ultimate Parent.

The majority of 'Payables to Entities Controlled by the Immediate Parent' relate to balances

payable to the Health Administration Corporation, an Entity Controlled by the Immediate

Parent.

Details regarding credit risk, liquidity risk and market risk, including a maturity analysis of the

above payables are disclosed in Note 38.

26. Borrowings

Current

753 732 Other Loans 753 732

753 732 753 732

Non-Current

5,565 6,319 Other Loans 5,565 6,319

5,565 6,319 5,565 6,319

'Other Loans' include balances due to entities controlled by the ultimate parent. All of the

balances are due to NSW Treasury.

No assets have been pledged as security/collateral for liabilities and there are no restrictions

on any title to property.

Final repayment of the loan is scheduled for 31 December 2027.

Details regarding credit risk, liquidity risk and market risk, including a maturity analysis of the

above borrowings are disclosed in Note 38.





2019 2018 2019 2018

$000 $000 $000 $000

27. Provisions

Current

----- ----- Annual Leave - Short Term Benefit 108,220 104,777

----- ----- Annual Leave - Long Term Benefit 69,135 63,851

----- ----- Long Service Leave Consequential On-Costs 32,476 27,256

----- ----- Provision for Other Employee Benefits 5,040 4,202

214,309 199,525 Provision for Personnel Services Liability ----- -----

100,300 100,300 Other * 100,300 100,300

314,609 299,825 315,171 300,386

*In November 2016, a judgement was handed down by the NSW Supreme Court in regard to a

legal matter. Final damages to be awarded to the claimant are yet to be determined by the

Court. As per paragraph 92 of AASB 137 'Provisions, Contingent Liabilities and Contingent

Assets', further information about this matter has not been reported as it may prejudice the

position of the entity in relation to the dispute.

Non-Current

----- ----- Long Service Leave Consequential On-Costs 2,824 2,370

2,824 2,370 Provision for Personnel Services Liability ----- -----

2,824 2,370 2,824 2,370

Aggregate Employee Benefits and Related On-Costs

----- ----- Provisions - Current 214,871 200,086

----- ----- Provisions - Non-Current 2,824 2,370

----- ----- Accrued Salaries, Wages and On-Costs, Taxation and Payroll Deductions (Note 25) 34,464 30,028

251,480 231,809 Liability - Purchase of Personnel Services ----- -----

251,480 231,809 252,159 232,484

Movements in provisions (other than employee benefits)

Movements in 'Other' provisions during the financial year, are set below:

100,300 115,300 Carrying amount at 1 July 100,300 115,300

----- (15,000) - Unused Amounts Reversed ----- (15,000)

100,300 100,300 Carrying amount at 30 June 100,300 100,300

28. Other Liabilities

Other Current Liabilities

391 255 Unearned Revenue 2,747 870

391 255 2,747 870





2019 2018 2019 2018

$000 $000 $000 $000

29. Commitments

a) Capital Commitments

Aggregate capital expenditure for the acquisition of land and buildings, plant and equipment,

infrastructure systems, and intangible assets, contracted for at balance date and not provided

for:

128,022 29,805 Within one year 128,022 29,805

124,858 5,073 Later than one year and not later than five years 124,858 5,073

252,880 34,878 Total (Including GST) 252,880 34,878

The majority of 'Capital Commitments' contracted but not provided for related to capital works

overseen by the Health Administration Corporation, an Entity Controlled by the Immediate

Parent.

b) Operating Lease Commitments

Entity as Lessee

Future minimum rentals payable under non-cancellable operating lease at balance date are as

follows:

5,077 6,260 Within one year 5,077 6,260



The 'Operating Lease Commitments' above are for properties, motor vehicles, information

technology, equipment including personal computers, medical equipment and other equipment.

Entity as Lessor

Future minimum rentals receivable under non-cancellable operating lease at balance date are

as follows:

1,928 1,931 Within one year 1,928 1,931


5,015 5,549 Later than five years 5,015 5,549


The 'Operating Lease Commitments' above are for lease of property and equipment.

c) Input Tax Receivable Related to Commitments for Expenditure

The total 'Capital Expenditure Commitments' and 'Operating Lease Commitments (Entity as

Lessee)' of $265.448M as at 30 June 2019 includes input tax credits of $24.131M that are

expected to be recoverable from the Australian Taxation Office (2018 $4.250M).

Output Tax Payable Related to Commitments for Revenue

The 'Operating Lease Commitments (Entity as Lessor)' of $9.962M as at 30 June 2019

includes taxable sales of $0.906M that are expected to be payable to the Australian Taxation

Office (2018 $1.100M).





30. Trust Funds

2019 2018 2019 2018 2019 2018 2019 2018 2019 2018

$000 $000 $000 $000 $000 $000 $000 $000 $000 $000

Balance at the beginning of the financial year 130 166 547 531 6,283 6,018 4,524 5,993 11,484 12,708

Add: Receipts 344 299 23 82 39,175 38,173 3,199 3,000 42,741 41,554

Less: Expenditure (326) (335) (331) (66) (39,479) (37,908) (3,782) (4,469) (43,918) (42,778)

Balance at the end of the financial year 148 130 239 547 5,979 6,283 3,941 4,524 10,307 11,484

The following list provides a brief description of the purpose of the trust fund categories.

Category Purpose

Patient Trust

Refundable Deposit

Private Practice Trust Funds

Third Party Funds

The safe custody of patients’ valuables including monies.

A sum of money held in trust as a security deposit.

The revenue derived from private patient and other billable services provided by Staff Specialists.

A sum of money held in trust on behalf of external parties, e.g. external foundations, volunteer groups and auxiliaries.

SLHD holds trust funds of $10.3M which are held for the safe keeping of patients' monies, deposits on hired items of equipment and Private Practice Trusts.

These funds are excluded from the financial statements as SLHD cannot use them for the achievement of its objectives. The following is a summary of the transactions in the trust account.

Patient Trust Refundable DepositsPrivate Practice

Trust FundsThird Party Funds Total





2019 2018 2019 2018

$000 $000 $000 $000

31. Reconciliation of Cash Flows from Operating Activities to Net Result

89,091 51,098 Net Cash Used on Operating Activities 91,159 53,229

(56,295) (54,474) Depreciation and Amortisation Expense (57,160) (55,393)

(4,891) (7,296) Allowance for impariment (4,891) (7,296)

(136) (4) (Increase) / Decrease Unearned Revenue (1,877) (523)

(15,076) (2,048) (Increase) / Decrease in Provisions (15,076) (2,139)

15,752 3,042 Increase / (Decrease) in Prepayments and Other Assets 15,459 3,194

(8,647) 11,021 (Increase) / Decrease in Payables (8,613) 10,937

(2,744) (224) Net Gain / (Loss) on Sale of Property, Plant and Equipment (2,757) (248)

2,229 (10,003) Assets Donated or Brought to Account / Emerging Assets Recognised 2,229 (10,003)

19,283 (8,888) Net Result 18,473 (8,242)

32. Non-Cash Financing and Investing Activities

458 (11,104) Assets Donated or Brought to Account 458 (11,104)

1,771 1,101 Emerging Rights to Assets Recognised 1,771 1,101

2,229 (10,003) 2,229 (10,003)




33. Changes in Liabilities arising from Financing Activities

2018 Cash Flow

Non-cash Changes

Other 2019

$000 $000 $000 $000

Borrowings and Advances 7,051 (732) (1) 6,318

34. 2018/19 Voluntary Services

- Chaplaincies and Pastoral Care - Patient & Family Support

- Pink Ladies / Hospital Auxiliaries - Patient Services, Fund Raising

- Patient Support Groups - Practical Support to Patients and Relatives

- Community Organisations - Counselling, Health Education, Transport, Home Help & Patient Activities

35. Unclaimed Monies

All money and personal effects of patients which are left in the custody of the SLHD by any patient who is discharged or dies in the hospital and which are not claimed by the person lawfully entitled thereto within a

period of twelve months are recognised as the property of the SLHD.

All such money and the proceeds of the realisation of any personal effects are lodged to the credit of the Samaritan Fund which is used specifically for the benefit of necessitous patients or necessitous outgoing

patients.

It is considered impracticable to quantify the monetary value of voluntary services provided to SLHD. Services received free, or for nominal consideration include:




PARENT AND CONSOLIDATED


36. Adjusted Budget Review

Net Result

Assets and Liabilities

Cash Flows

$000

Initial Allocation, 01/07/2018 1,290,567

Award Increases 2,840

Special Projects:

Growth Allocation - as per Schedule C Initial budget 2018/19 82,049

Revenue Final Alignment 18,032

Intra Health Escalations 3,923

Transfer of Tresillian Budget 3,379

Treatment of 2018-19 Expenditure -Concord Hospital - Superannuation 3,327

Information, Communication and Technology Intra Health Adjustments 2,911

Non Emergency Patient Transport - budget transfer of Green Fleet from HealthShare to LHDs 2,464

National Partnership Agreement on Adult Public Dental Services 2,400

Annualised Chris O'Brien Lifehouse Activity Based Funding 2,343

2018/19 Treasury Managed Fund Budget Adjustments 2,317

Budget Escalation for HealthShare NSW 2,212

Electricity Escalations 2,162

Annualised Chris O'Brien Lifehouse JMO 2,100

Integrated Care Initiative 1,638

High Cost Drugs Expense Escalation 1,499

Data Improvement Project 750

Miscellaneous 216

Balance as per Statement of Comprehensive Income 1,427,129

At Consolidation level, SLHD's net increase in Cash and Cash Equivalents for the 2018/19 financial year was ($1.423M). This comprised a net increase in cash flows from Operating activities of

$91.160M, a net decrease in cash flows from Investing activities of $91.851M which includes purchase of captial assets for $90.122M and proceeds on sale of existing assets for $0.037M; and

Purchase of Investments/Proceeds from Sale of Investments with a net decrease for $1.766M. The decrease in cash flows from Investing activities reflected a range of capital works and assets

purchases including the Minor Works and Equipment>$10k<$250K ($11.702M), Concord Hospital Radiography Flouroscopy ($0.594M), RPAH Pet MR ($5.117M), RPAH Replacement of 2 Philips

Bucky Diagnost x-ray units ($0.516M), RPA Hospital - Relocation of Emergency Medicine Services ($2.564M), RPA Respiratory Labs ($0.744M), RPA Renal Dialysis Relocation to PMBC ($2.166M),

RPA Hydrotherapy pool ($0.325M), Bridge Street Community & Family Centre ($1.259M), Canterbury Hospital TSSU Equipment Replacement ($0.416M), RPAH Cyclotron Extension ($2.831M),

Canterbury Hospital Replace X-Ray Equipment ($0.365M), RPAH Replacement of CUSA ($0.598M), RPAH Pre-clinical PET-MR device ($1.932M), RPAH Cardiology Machine Replacement

($0.260M), Concord Hospital X-Ray Machines ($1.198M), Dame Eadith Walker Estate - Landscaping ($0.586M), RPAH Gloucester House Demountable Buildings ($0.342), Concord Hospital -

Operating Theatres Renovation ($1.562M), Sydney LHD EEGP ($0.055M), Fussell House - Concord Repatriation General Hospital (CRGH) ($0.571M), Canterbury Hospital Emergency Department

Expansion ($1.059M), Asset Refurbishment/Replacement Strategy ($2.579M), RPA Energy Efficiency Government Program (EEGP) ($3.051M), and Health Infrastructure WIP transfers ($47.729M).

Movements in the level of the NSW Ministry of Health Recurrent Allocation that have occurred since the time of the initial allocation on 1 July 2018 are as follows:

The actual Net Result was better than the adjusted budget by $21M, primarily due to:

As at 30 June 2019 SLHD Consolidation had Current Assets of $293.773M and Current Liabilities of $411.536M. Non Current Assets totalled $1,790.769M and Non Current Liabilities were $8.389M.

During 2018/19 the value of SLHD's land and buildings were revalued by an independent valuer. This financial year the District has continued to record an emerging asset for a building situated on the

District's land that is owned and operated by Lifehouse Australia. Overall SLHD has a sound asset base with Net Assets of $1,664.617M.

In accordance with the Ministry of Health's Performance Framework SLHD has been rated at Performance Level 0 (highest possible rating), for the entire nine months to the end of 30 June 2019. This

performance is a continuation of the monthly rating achieved for the previous seven financial years.

As at 30 June 2019 the District's Consolidated Net Result is $20.644M favourable to the full year budget. The Parent result was $21.454M favourable to budget. This reflects the impact of comparing

the twelve months result to the full year budget.




37. Increase / (Decrease) in Net Assets from Equity Transfers

Equity transfers effected in the 2018/19 year were:

a)

b)

Equity transfers effected in the 2017/18 year were:

2019 2018

Equity transfers effected comprised: $000 $000

a) (162) -----

b) (9,652) -----

(9,814) -----

Assets and Liabilities transferred are as follows:

2019 2018

$000 $000

Assets

a) Nil ----- -----

b) (9,652) -----

Liabilities

a) (162) -----

b) ----- -----

Increase / (Decrease) in Net Assets From Equity Transfers (9,814) -----

Annual Leave Provision




An equity transfer has been made between NSW Health entities to realign the annual leave liability to the current legal employer as held in the payroll system (StaffLink) for various employment

arrangements, including staff on rotation and secondment. This has resulted in an decrease in net assets of $0.162M relating to the transfer of Annual Leave provision balances from other NSW

Health entities.

Annual Leave Provision - Transfer of Annual Leave Provisions between NSW Health entities

Land & Building - Transfer to Ambulance NSW

Nil

Nil

Land & Building

An equity transfer has been made for the transfer of Land & Building (44-50 Parramatta Road, Glebe) from SLHD to Ambulance NSW for the Statewide Ambulance Station alignment. This has

resulted in an decrease in net assets of $9.652M relating to the transfer of Land & Building balances to Ambulance NSW.

38. Financial Instruments

(a) Financial Instrument Categories

i. As at 30 June 2019 under AASB 9

PARENT Carrying Amount

2019

Class $000

Cash and Cash Equivalents (Note 16) 95,261

Receivables (Note 17)¹ 75,573

Other Financial Assets (Note 19) 77,447

248,281

Financial Liabilities

Borrowings (Note 26) 6,318

Payables (Note 25) ² 85,329

91,647

Notes

CONSOLIDATION Carrying Amount

2019

Class $000




274,036




91,926

Notes

N/A

Amortised cost

Amortised cost

Amortised cost

Amortised cost




SLHD's principal financial instruments are outlined below. These financial instruments arise directly from SLHD's operations or are required to finance its operations. SLHD does not enter into or trade

financial instruments, including derivative financial instruments, for speculative purposes.

SLHD's main risks arising from financial instruments are outlined below, together with SLHD's objectives, policies and processes for measuring and managing risk. Further quantitative and qualitative

disclosures are included throughout these financial statements.

The Chief Executive has overall responsibility for the establishment and oversight of risk management and reviews and agrees policies for managing each of these risks. Risk management policies

are established to identify and analyse the risks faced by SLHD, to set risk limits and controls and to monitor risks. Compliance with policies is reviewed on a continuous basis.

N/A

Category

Category

Total Financial Assets

Financial liabilities measured at amortised cost




Total Financial Liabilities

1 Excludes statutory receivables and prepayments (i.e. not within scope of AASB 7 Financial Instruments: Disclosures).

2 Excludes statutory payables and unearned revenue (i.e. not within scope of AASB 7 Financial Instruments: Disclosures).









ii. As at 30 June 2018 under AASB 139 (comparative period)

PARENT Carrying Amount

2018

Class $000




238,851




84,387

Notes

CONSOLIDATION Carrying Amount

2018

Class $000




263,483




84,749

Notes

b) Financial Risk

i. Credit Risk

Cash and Cash Equivalents

N/A

Loans and receivables (at amortised cost)


Category

N/A



Category













SLHD considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, SLHD may also consider a financial asset to be in default when internal or

external information indicates that SLHD is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by SLHD.

Credit risk arises when there is the possibility that the counterparty will default on their contractual obligations, resulting in a financial loss to SLHD. The maximum exposure to credit risk is generally

represented by the carrying amount of the financial assets (net of any allowance for credit losses or allowance for impairment).

Credit risk associated with SLHD's financial assets, other than receivables, is managed through the selection of counterparties and establishment of minimum credit rating standards. Authority

deposits held with NSW TCorp are guaranteed by the State.

The TCorpIM Funds investment facility is discussed in paragraph (d) below.

Credit risk arises from financial assets of SLHD, including cash, receivables and authority deposits. No collateral is held by SLHD. SLHD has not granted any financial guarantees.

Cash comprises cash on hand and bank balances deposited within the NSW Treasury banking system. Interest is earned on daily bank balances at rates of approximately 0% (Restricted funds bank

balance 2.35%) in 2018/19 compared to 0% (Restricted funds bank balance 2.35%) in the previous year.





Receivables - Trade Debtors

PARENT

Current <30 days 30-60 days 61-90 days >91 days Total

30 June 2019 $000 $000 $000 $000 $000 $000

Expected credit loss rate 4% 7% 11% 21% 27% 11%

Estimated total gross carrying amount at default 27,397 4,585 2,793 1,892 10,956 47,623

Expected credit loss 1,227 301 302 400 3,011 5,241


1 July 2018 $000 $000 $000 $000 $000 $000


Estimated total gross carrying amount at default 24,450 3,394 1,426 836 7,929 38,035

Expected credit loss 896 157 218 268 2,802 4,341

CONSOLIDATION


30 June 2019 $000 $000 $000 $000 $000 $000


Estimated total gross carrying amount at default 27,748 4,585 2,793 1,892 10,956 47,974

Expected credit loss 1,227 301 302 400 3,011 5,241


1 July 2018 $000 $000 $000 $000 $000 $000


Estimated total gross carrying amount at default 24,882 3,394 1,426 836 7,929 38,467

Expected credit loss 896 157 218 268 2,802 4,341

Receivables - Trade Debtors

To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due.

SLHD applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade debtors.

SLHD is not materially exposed to concentrations of credit risk to a single trade debtor or group of debtors as at 30 June 2019.

Other Financial Assets - Authority Deposits

Accounting policy for impairment of Trade Debtors and Other Financial Assets under AASB 9

Collectability of trade debtors is reviewed on an ongoing basis. Procedures as established in the Treasurer's Directions are followed to recover outstanding amounts, including letters of demand.

The expected loss rates are based on historical observed loss rates. The historical loss rates are adjusted to reflect current and forward-looing inforation on macroeconomic factors affecting the

ability of the customers to settle the receivables. SLHD has not identified any relevant factors, and accordingly not adjusted the historical loss rates based on no expected changes in these factors.

SLHD has placed funds on deposit with TCorp, which has been rated 'AAA' by Standard and Poor’s. These deposits are similar to money market or bank deposits and can be placed 'at call' or for a

fixed term. These deposits are considered to be low credit risk, and the loss allowance recognised during the period was therefore limited to 12 months expected losses. SLHD didn't recognise a

provision for expected credit losses on its other financial assets in 2019.

Accounting policy for impairment of Trade Debtors and Other Financial Assets under AASB 139 (comparative period only)

SLHD is not materially exposed to concentrations of credit risk to a single trade debtor or group of debtors. Based on past experience, debtors that are not past due are not considered impaired.

In addition Patient Fees Compensables are frequently not settled within 6 months of the date of the service provision due to the length of time it takes to settle legal claims. Most of SLHD's debtors

are health insurance companies or compensation insurers settling claims in respect of inpatient treatments.

Financial assets that are past due or impaired could be either 'Sales of Goods and Services' or 'Other Debtors' in the 'Receivables' category of the Statement of Financial Position. Patient Fees

Ineligibles represent the majority of financial assets that are past due or impaired.

Trade debtors are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others a failure to make contractual

payments for a period of greater than 90 days past due

The loss allowance for trade debtors (Sale of Goods and Services) as at 30 June 2019 and 1 July 2018 (on adoption of AASB 9) was determined as follows:

All trade debtors are recognised as amounts receivable at balance date. Collectability of trade debtors is reviewed on an ongoing basis. Procedures as established in the NSW Ministry of Health

Accounting Manual for Public Health Organisations and Fee Procedures Manual are followed to recover outstanding amounts, including letters of demand. Debts which are known to be uncollectable

are written off. An allowance for impairment is raised when there is objective evidence that SLHD will not be able to collect all amounts due. This evidence includes past experience and current and

expected changes in economic conditions and debtor credit ratings. No interest is earned on trade debtors.





PARENT 2018

$000

Neither past due nor impaired 52,106

Past due but not impaired1,2

< 3 months overdue 4,983

3 - 6 months overdue 6,608

> 6 months overdue 1,125

Impaired1,2

< 3 months overdue -----

3 - 6 months overdue -----

> 6 months overdue 5,549 Total

1,270,371

CONSOLIDATION 2018

$000

Neither past due nor impaired 52,396

Past due but not impaired1,2

< 3 months overdue 5,117

3 - 6 months overdue 6,672

> 6 months overdue 1,125

Impaired1,2

< 3 months overdue -----

3 - 6 months overdue -----

> 6 months overdue 5,549 Total

1,270,859

Notes

1 The table reports 'gross receivables'.

Authority Deposits

ii. Liquidity Risk

For other suppliers, where settlement cannot be effected in accordance with the above, e.g. due to short term liquidity constraints, contact is made with creditors and terms of payment are negotiated

to the satisfaction of both parties.

SLHD has exposure to liquidity risk. However, the risk is minimised by the service agreement with the NSW Ministry of Health, as the annual service agreement requires local management to control

its financial liquidity and in particular meet benchmarks for the payment of creditors. Where SLHD fails to meet service agreement performance standards, the Ministry as the state manager can take

action in accordance with annual performance framework requirements, including providing financial support and increased management interaction (refer Note 1).

Liabilities are recognised for amounts due to be paid in the future for goods or services received, whether or not invoiced. Amounts owing to suppliers (which are unsecured) are settled in accordance

with the policy set by the NSW Ministry of Health in accordance with NSW Treasury Circular 11/12. For small business suppliers, where terms are not specified, payment is made not later than 30

days from date of receipt of a correctly rendered invoice. For other suppliers, if trade terms are not specified, payment is made no later than the end of the month following the month in which an

invoice or a statement is received.

For small business suppliers, where payment is not made within the specified time period, simple interest must be paid automatically unless an existing contract specifies otherwise.

2 The ageing analysis excludes statutory receivables, as these are not within the scope of AASB 7 Financial Instruments Disclosures. Therefore, the "total" will not reconcile to the receivables total

recognised in the statement of financial position.

SLHD has negotiated no loan outside of arrangements with the NSW Ministry of Health or NSW Treasury.

During the current and prior year, there were no defaults of loans payable. No assets have been pledged as collateral.

SLHD has placed funds on deposit with TCorpIM Funds investment facilities, which has been rated 'AAA' by Standard and Poor's. These deposits are similar to money market or bank deposits and

can be placed 'at call' or for a fixed term. There were no indicators for impariment on these securities during the year.

Liquidity risk is the risk that SLHD will be unable to meet its payment obligations when they fall due. SLHD continuously manages risk through monitoring future cash flows and maturities planning to

ensure adequate holding of high quality liquid assets. The objective is to maintain a balance between continuity of funding and flexibility through the use of overdrafts, loans and other advances.

For the comparative period 30 June 2018, the ageing analysis of trade debtors is as follows:


Maturity Analysis and interest rate exposure of financial liabilities

PARENT

Weighted

Average

Effective

Interest Rate Nominal Amount 1

Fixed Interest

Rate

Variable Interest

Rate

Non - Interest

Bearing < 1 Yr 1-5 Yr > 5Yr

$000 $000 $000 $000 $000 $000 $000

2019

Payables:

- Creditors2

85,329 ----- ----- 85,329 85,329 ----- -----

Borrowings:

- Loans and Deposits 2.91% 7,105 7,105 ----- ----- 932 4,518 1,655

92,434 7,105 ----- 85,329 86,261 4,518 1,655

2018

Payables:

- Creditors2

77,336 ----- ----- 77,336 77,336 ----- -----

Borrowings:


85,374 8,038 ----- 77,336 78,268 4,613 2,493

CONSOLIDATION

Weighted

Average

Effective

Interest Rate Nominal Amount 1

Fixed Interest

Rate

Variable Interest

Rate

Non - Interest

Bearing < 1 Yr 1-5 Yr > 5Yr

$000 $000 $000 $000 $000 $000 $000

2019

Payables:

- Creditors2

85,608 ----- ----- 85,608 85,608 ----- -----

Borrowings:


92,713 7,105 ----- 85,608 86,540 4,518 1,655

2018

Payables:

- Creditors2

77,698 ----- ----- 77,698 77,698 ----- -----

Borrowings:


85,736 8,038 ----- 77,698 78,630 4,613 2,493

Notes:


1 The amounts disclosed are the contractual undiscounted cash flows of each class of financial liabilities based on the earliest date on which SLHD can be required to pay. The tables include both

interest and principal cash flows and therefore will not reconcile to the Statement of Financial Position.




Maturity DatesInterest Rate Exposure

The table below summarises the maturity profile of SLHD's financial liabilities together with the interest rate exposure.

Interest Rate Exposure Maturity Dates


iii. Market Risk

Interest Rate Risk

PARENT

Carrying Amount Net Result Equity Net Result Equity

2019 $000 $000 $000 $000 $000

Financial Assets

Cash and Cash Equivalents 95,261 (953) (953) 953 953

Receivables 75,573 ----- ----- ----- -----

Other Financial Assets 77,447 (774) (774) 774 774


85,329 ----- ----- ----- -----

Borrowings 6,318 63 63 (63) (63)

2018

Financial Assets


Receivables 64,822 ----- ----- ----- -----



77,336 ----- ----- ----- -----

Borrowings 7,051 71 71 (71) (71)

CONSOLIDATION

Carrying Amount Net Result Equity Net Result Equity

2019 $000 $000 $000 $000 $000

Financial Assets


Receivables 75,982 ----- ----- ----- -----



85,608 ----- ----- ----- -----

Borrowings 6,318 63 63 (63) (63)

2018

Financial Assets

Cash and Cash Equivalents 100,047 (1,000) (1,000) 1,000 1,000

Receivables 65,310 ----- ----- ----- -----



77,698 ----- ----- ----- -----

Borrowings 7,051 71 71 (71) (71)

The effect on net result and equity due to a reasonably possible change in risk variable is outlined in the information below, for interest rate risk and other price risk. A reasonably possible change in

risk variable has been determined after taking into account the economic environment in which SLHD operates and the time frame for the assessment (i.e. until the end of the next annual reporting

period). The sensitivity analysis is based on risk exposures in existence at the Statement of Financial Position date. The analysis is performed on the same basis for 2018. The analysis assumes that

all other variables remain constant.

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate baecause of changes in market interest rates. Exposure to interest rate risk arises primarily

through SLHD's interest bearing liabilities. This risk is minimised by undertaking mainly fixed rate borrowings, primarily through NSW TCorp. SLHD does not account for any fixed rate financial

instruments at fair value through profit or loss or as at fair value through other comprehensive income or available for sale (until 30 June 2018). Therefore, for these financial instruments, a change

in interest rates would not affect profit or loss or equity. A reasonably possible change of +/- 1% is used, consistent with current trends in interest raes (based on official Reserve Bank of Australia

interest rate voliatility over the last five years). The basis will be reviewed annually and amended where there is a structural change in the level of interest rate volatility.

+1%-1%

1Excludes statutory payables and unearned revenue (i.e. not within scope of AASB7 Financial Instruments: Disclosures).

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. SLHD's exposures to market risk are primarily through interest

rate risk on SLHD's borrowings and other price risks associated with the movement in the unit price of the T-CorpIM Fund investment facilities. SLHD has no exposure to foreign currency risk and

does not enter into commodity contracts.




However, SLHD is not permitted to borrow external to the NSW Ministry of Health (except energy loans which are negotiated through NSW Treasury). Both NSW Treasury and NSW Ministry of

health loans are set at fixed rates and therefore are generally not affected by fluctuations in market rates.

The following table demonstrates the sensitivity to a reasonably possible change in insterest rates:

-1% +1%

1Excludes statutory payables and unearned revenue (i.e. not within scope of AASB7 Financial Instruments: Disclosures).

Payables1

Payables1

Payables1

Payables1





Other price risk - TCorpIM Funds investment facilities

2019 2018

Facility Investment Sectors Investment Horizon $000 $000

Cash fund Up to 1.5 years 31,464 28,017

Impact on net result

Change in unit price 2019 2018

$000 $000

+/- 1% 315 280

c) Fair Value Measurement

i. Fair value compared to carrying amount

Fair Value Level

2019 2018 2019 2018

$'000 $'000 $'000 $'000

Financial assets

31,464 28,017 31,464 28,017

ii. Fair Value recognised in the Statement of Financial Position

Level 1 Level 2 Level 3 2019 Total

$'000 $'000 $'000 $'000

TCorpIM Funds ----- 31,464 ----- 31,464

Level 1 Level 2 Level 3 2018 Total

$'000 $'000 $'000 $'000

TCorpIM Funds ----- 28,017 ----- 28,017

The value of the TCorpIM Funds investment is based on SLHD's share of the value of the underlying assets of the facility, based on the market value. All of the TCorpIM Funds investment facilities

are valued using 'redemption' pricing.

The table above only includes financial assets as no financial liabilities were measured at fair value in the Statement of Financial Position.

There were no transfers between level 1 and 2 during the period ended 30 June 2019.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement

is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability or in the absence of a principal market, in the

most advantageous market for the asset or liability.

The amortised cost of financial instruments recognised in the Statement of Financial Position approximates the fair value, because of the short term nature of many of the financial instruments.

The following table details the financial instruments where the fair value differs from the carrying amount:

Therefore the fair value of the financial instruments do not differ from the carrying amount.

Carrying amount Fair value

TCorpIM Funds

TCorp as trustee for each of the above facilities is required to act in the best interest of the unit holders and to administer the trusts in accordance with the trust deeds. As trustee, TCorp has

appointed external managers to manage the performance and risk of each facility in accordance with a mandate agreed by the parties. TCorp has also leveraged off internal expertise to manage

certain fixed income assets for the TCorpIM Funds investment facilities. A significant portion of the administration of the facilities is outsourced to an external custodian.

TCorp Funds investment provides sensitivity analysis information for each of the Investment facilities, using historically based volatility information collected over a ten year period, quoted at two

standard deviations (ie 95% probability). TCorpIM Funds investment facilities are designated at fair value through profit or loss and therefore any change in unit price impacts directly on profit (rather

than equity).

The unit price of each facility is equal to the total fair value of net assets held by the facility divided by the total number of units on issue for that facility. Unit prices are calculated and published daily.

Investment in the TCorpIM Funds investment facilities limits SLHD's exposure to risk, as it allows diversification across a pool of funds with different investment horizons and a mix of investments.

Exposure to 'other price risk' primarily arises through the investment in the TCorpIM Funds investment facilities, which are held for strategic rather than trading purposes. SLHD has no direct equity

investments. SLHD holds units in the following TCorpIM Funds investment trusts:

TCorpIM - Cash fund

A reasonably possible change is based on the percentage change in unit price (as advised by NSW TCorpIM) multiplied by the redemption value as at 30 June each year for each facility (balance

from IM Funds Statement).

Cash and money market instruments

39. Related Party Transactions


Key management personnel compensation is as follows:

2019 2018

$000 $000

Short-Term Employee Benefits 607 681

Post-Employment Benefits 48 48

655 729

Transactions with key management personnel and their close family members

Transactions with ultimate parent

There were no transactions with the ultimate parent during the financial year (2018: $Nil).

40. Events After the Reporting Period

END OF AUDITED FINANCIAL STATEMENTS

During the financial year, Sydney Local Health District obtained key management personnel services from the immediate parent and incurred $0.489 million (2018: $0.519 million) for these

services.

Compensation for the Minister for Health is paid by the Legislature and is not reimbursed by the Ministry of Health and its controlled entities. Accordingly no such amounts are included in the key

management personnel compensation disclosures above.

There has not been any matters arising subsequent to balance date that would require these financial statements to be amended.


There were no transactions with key management personnel and their close family members during the financial year (2018: $Nil).



Remuneration for the Secretary and Deputy Secretaries are paid by the Ministry of Health and is not reimbursed by the health entities. Accordingly no such amounts are included in the key

management personnel compensation disclosures above.

Documents

Financial Statements...The Chief Executive is responsible for the preparation and fair presentation of the financial statements in accordance with Australian Accounting Standards and